Iraq is Returning to its Pre-War Self

The US invasion of Iraq and subsequent Iraq War cut Iraqi oil production down to 1.9 million barrels per day in 2006. Now that the war is over and some stability has been restored, crude output is up to 3.4 million barrels of crude a day. Roughly 74%, or 2.6 million barrels, of that crude is exported each day, and in order to keep growing output, Iraq is going to expand export capacity up to 4 million bpd by the end of 2014.

One major reason why output is expected to keep rising from Iraq is due to the development of the West Qurna-1 oilfield by ExxonMobil and PetroChina. Why is this oilfield so important? Because it could be home to 43 billion barrels of recoverable resources, or in other words, enough to produce 4 million bpd for almost 30 years or 35 years at current output levels.

Due to the potential of the West-Qurna and Kurdistan, Iraq could see crude output rise to 6.1 million bpd by 2020, according to the IEA. This would be an additional 2.7 million bpd in output over the course of just six years, which is why Iraq wants to boost export capacity.

By 2014, Iraq wants to increase its export capacity to 4 million bpd, which will have to be increased to at least 5 million bpd by 2020 if the guidance IEA gave is right. This would add roughly 2.4 million bpd to global supply, most of which would go to Asia. Iraq is becoming a bigger and bigger player in the global energy market, with ExxonMobil leading the charge from the North while PetroChina boosts output from the South.