Overall, Iraq’s petroleum industry has seen two divergent trends in 2009. Production has consistently gone up since January where it started at 2.15 million barrels a day, and then peaked at 2.50 million barrels by September, the benchmark set by the Oil Ministry for 2009. At the same time, exports have followed a rollercoaster pattern, starting high in January at 1.91 million, then dropping in February to 1.77, then climbing back up to 2.08 million barrels a day in July, a post-invasion high, before falling to 1.87 million last month. An average of 2.00 million barrels a day in exports was the mark called for in the 2009 budget, which has not been achieved.
Iraq’s highest oil production since 2003 was in 2008 when it produced 2.50-2.60 million barrels a day from May to August. By the end of that year Iraq averaged 2.41 million barrels. So far, from January to October 2009, it has averaged 2.16 million barrels. This year has seen the most exports at a yearly average of 1.91 million barrels. The previous high was in 2008 at 1.84 million. Those numbers are still below pre-war levels when Iraq was producing around 2.8 million barrels a day. Before the 1991 Gulf War and international sanctions, it was able to average 3.5 million barrels a day in overall output.
Due to the on-going global recession, Iraq’s revenue from petroleum is also down from previous years even though the price of a barrel of Iraqi crude has increased during the year. At the beginning of 2009 Iraqi oil was selling for $36 a barrel. That has since increased to $71.94 in October. That has brought in $29.1 billion so far. That compares to $61.9 billion in 2008, and $41.0 billion in 2007. The overwhelming majority of Iraq’s funds come from oil. The economy is still largely state-run as well, so the government is the major source of investment and jobs.
As reported before, Baghdad has had to scale back its budget two years straight because of the combination of low prices and uneven exports, and is going to run a deficit for the second straight year, which had not happened since the 2003 invasion. Iraq’s petroleum industry suffers from old and aging infrastructure, too much government bureaucracy, inadequate planning, and deep political divisions within parliament, and between Baghdad and the Kurdistan Regional Government over who has control of contracts and future development of oil fields, all of which have held up development of the industry.
Monthly Averages of Iraqi Oil Production/Exports in Millions of Barrels Per Day
Associated Press, “Iraq’s Oct. oil exports drop due to attacks,” 11/22/09
Aswat al-Iraq, “Iraq’s oil exports in Oct. reach 58.2m barrels,” 11/22/09
Bureau of Near Eastern Affairs, “Iraq Status Report,” U.S. Department of State, 11/18/09
Elliott, Michael, “So, What Went Wrong?” Time, 10/6/03
Reuters, “Bomb Attacks Halts Iraq-Turkey Oil Pipeline,” 11/24/09
Special Inspector General for Iraq Reconstruction, “Quarterly Report to the United Sates Congress,” 10/30/09