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unhappycamper

(60,364 posts)
Sat Jun 14, 2014, 08:56 AM Jun 2014

Iraq's oil industry faces setback to revival

http://www.cnbc.com/id/101759641

Iraq's oil industry faces setback to revival
Clifford Krauss
3 Hours Ago
The New York Times

After a long history of wars and sanctions, Iraq re-emerged as a critical source of oil in recent years. Mounting Iraqi production helped to ease world oil prices despite the tightening restrictions on Iran and tanking exports from Libya. And Western and Chinese oil companies rushed back, revitalizing long-neglected oil fields in the north and south.

Now suddenly all that progress has been put in jeopardy with the intense military offensive by extremist insurgents.



Kurdish Peshmerga forces and Iraqi special forces deploy their troops and armoured vehicles outside of the oil-rich city of Kirkuk, Iraq

The stakes for the oil markets are high as the Iraqi government tries to gain control over the situation. An eventual decline in Iraqi exports would put pressure on China and India to increase their imports of Iranian oil again, weakening the United States government's position in negotiations with Tehran over nuclear policies. Russian oil exports would become more crucial for global markets, potentially strengthening the Kremlin's hand in Ukraine. And a major spike in global oil prices could help unfriendly regimes like Venezuela.

"The collapse of Iraq would bring an international oil crisis," said Dragan Vuckovic, president of Mediterranean International, an oil service company that supplies state oil companies in Iraq. "It would mean crude oil would go up to $150 a barrel. It could spread unrest to Saudi Arabia and Kuwait."
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