Middle East Oil: Oily Business

There is much speculation that a campaign against Saddam Hussein is really about oil. But years of effort and investment would be needed to make the oil flow. Iraq’s traditional trading partners are there for the long haul and that may bring their military support too.

The World Today Published 1 November 2002 Updated 23 October 2020 4 minute READ

If protecting the commercial interests of American oil companies and getting more oil onto the market were prime objectives of the Bush administration, sanctions would be lifted against Iran and Libya. Orchestrating an invasion and change of regime in Iraq is a risky enterprise fraught with uncertainty about the short and medium term stability of key producing countries. The bounty of oil in Iraq will not be of any value for investors until that stability is ensured.

Iraq is not the panacea of the oil market; it supplies about two percent of world needs. If sanctions were lifted and the existing production and transport infrastructure repaired, that share could rise to four percent over the subsequent three years, at a cost of approximately $5.5 billion. With massive investment in a stable climate, the contribution could increase to six or seven percent over five to ten years.

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