Iraq is predicted to become a major oil producer in the next six years, but will it? According to the International Energy Agency’s (IEA) estimates, an increase in the production capacity of members of the Organization of Petroleum Exporting Countries (OPEC) until 2016 will be due to a growth in Iraq’s capacity. IEA believes that this Middle Eastern country will account for 80 percent of OPEC’s crude oil production in the next six years. Sitting on the world’s fourth largest proven petroleum reserves after Saudi Arabia, Iran and Canada, Iraq will undoubtedly increase OPEC’s oil output in the near to long term. However, political and security problems may delay its anticipated capacity growth.
Coinciding with the full withdrawal of the US forces from Iraq, the newest political fallout between the country’s Sunni vice-president and its Shi’a prime minister may fracture the delicate power-sharing agreement. It is unclear whether the new Iraq is able to provide its own security in light of signs of instability and fresh attacks on oil infrastructure. There are fears of Lebanonization of the country, that is, formalization of distribution of power along ethnic and sectarian lines, unless the fragile leadership manages to maintain the unity government. In this respect, major challenge remains keeping external influences away, primarily Iran, which has added its share to Iraq’s internal splits. As foreign energy majors seek entry to the Iraqi oil and gas fields, the fulfillment of its potential also hinges on the government’s approval of the 2007 Oil Law as well as a possible greater autonomy of various provinces from the central government to manage energy resources.