Sociologist Michael Schwartz, a sharp Iraq-watcher and author of a provocative book on the Iraq War, surveys the travails of Iraq’s oil industry since the 2003 Bush-Cheney invasion and points to the continued difficulties of the Iraq petroleum industry.
My own guess is that eventually the security situation will settle down enough to allow the foreign petroleum companies now signing bids to develop specific fields to press forward. It will be a long slow haul, but Iraqi petroleum will likely come online over time. When that expansion of production happens,it will have a big impact on Iraq. There will be massive internal migration of labor to the Basra and other oil-rich areas, mixing up Sunni Arabs and Kurds with regional labor migrants from e.g. Egypt, India and Pakistan.
The Neoconservative dreams that Iraq would rival or replace Saudi Arabia as swing producer, and that it would recognize and perhaps supply petroleum to Israel, however, are both unlikely developments. Moreover, as China, India and other Asian giants begin growing more rapidly and depending on automobiles, demand for petroleum could well grow so fast over the next twenty years that any new big fields’ production is just slurped up, with the world demanding more. That is, Rupert Murdoch’s notion that Iraq production could plunge prices down to $14 a barrel for the long term, helping industrialized economies, was always stupid, since it did not take account of rapidly growing demand from Asia.
The emergence of Iraq as a petroleum state (or rather a bigger, wealthier petroleum state) will also further upset the geopolitical balance in the Middle East. With a Shiite majority, it will offset Saudi Arabia in the Sunni-Shiite culture wars. It seems likely to have a big, well-trained and effective army, which cannot always be depended on to be allied with the interests of Washington. A military coup down the road cannot be ruled out (there are few democratic oil states, where petroleum supplies more than a third of the national income). And, it likely will be a friendly and supportive big brother to movements like Hizbullah in Lebanon. While it won’t always be on the same page as Iran, it will likely be an ally of and support for Tehran. One possibility is that a rich Iraq 20 or 25 years from now will be in a position to promote Twelver Shiism in the region, picking up some of the Alevis in Turkey, the Nusairis in Syria and the Zaidis in Yemen. With its possession of the Shiite holy cities of Najaf and Karbala, with the enormously influential chief cleric of Najaf as among its more prominent residents, Iraq’s soft power among Afghan, Pakistani and Indian Shiites has the potential for being greater than that of Iran.
In the end, an oil-rich, Shiite-dominated Iraq is far more likely to be a victory for the Shiite revival kicked off in 1979 by Imam Ruhollah Khomeini than a triumph for Richard Perle, Paul Wolfowitz, Daniel Pipes and the other hard line warmongers who advocated for a revolution-by-invasion in Iraq.
But Schwartz is correct that all these developments are likely a decade or more off.
End/ (Not Continued)