Iraq will become the world’s second-largest oil exporter within two decades and will account for 45 percent of the growth in global supplies this decade, according to an International Energy Agency report examined by the Financial Times.All this will come to pass, of course, if Iraq remains stable enough to continue growing its oil production. This constitutes a very big “if,” considering the violent conflict raging next door in Syria, which is pushing Iraq’s Shi’a majority into the arms of Iran, and considering Iraq’s own domestic problems.Assuming the Iraqi oil continues to flow, who stands to benefit most from the increased exports? China:
The agency forecasts that by 2020, 80 per cent of Iraq’s oil will go to Asia. Mr Birol said that by 2020, 1.5m b/d of Iraqi oil will be heading for China, and almost 2m b/d by 2035. “There is a new trade axis being formed between Baghdad and Beijing,” he said.
Who loses? The balance of power in OPEC could change considerably. If the IMF predictions are accurate, Iraq will overtake Iran and Venezuela in production.