Iraq is threat to Iran’s crude oil export market

Azerbaijan, Baku, Jan.26 / Trend T. Konyayeva /

Oil production growth in Iraq and its agreements with foreign oil companies, along with international economic sanctions applied against Iran, can turn Baghdad into a serious threat to Tehran's oil products export market, Trend Expert Council's member Reza Taghizadeh believes.

"Iraq is a threat to Iran's crude oil export market, more serious than Saudi Arabia with its 2.5 million barrel a day spare production capacity," Taghizadeh wrote Trend in an e-mail.

A growth in oil production in Iraq will not become a threat to Iran in the presence of investments in the development of the Iranian oil fields, the ISNA news agency quoted head of National Iranian Oil Company (NIOC) Ahmed Galebani as saying.

Galebani added that Iran needs to annually invest $30 billion in the oil sector to implement a program for a 20-year period to increase oil production, including through exploration of new oil fields.

With the program developed and put into force in 2006, within the next 15 years, Iran needs to invest $500 billion in projects to increase oil production to 7 million barrels per day.

In December, Iraq, which has one of the world's largest oil reserves, managed to bring oil production to the level of 2.7 million barrels per day, which is the highest figure over the past two decades. A growth in production is mainly observed in the fields of Al-Rumaila in the southeast and the al-Zubayr, developed by BP and the Italian company ENI.

According to Taghizadeh, at the moment, Iraq's oil export capacity is close to Iran's capabilities.

In addition, he said that Iraq offers foreign oil companies production-sharing agreements, whereas Iran, even regardless of economic sanctions, offers buyback agreements.

Taghizadeh believes that the oil companies would like to invest more and get more profits than only acting as oil contractors.

"Therefore, Iraq could offer them a lot more than Iran. If oil prices in the market go down, the seriousness of Iraqi oil to Iran market would be even more visible," he said.

According to him, given the fact that the cost of oil production in Iraq is slightly less than that of Iran, this threat is becoming even more serious with the Kurdistan oil contracts coming to the market.

All agreements that Kurdistan's Oil Ministry signed with foreign companies on production-sharing in the autonomous region of Iraqi Kurdistan, will be recognized by the Iraqi government, Iraq's new Oil Minister Abdul-Karim al-Lu'aibi said on Monday.

At present, authorities of the autonomous region have already signed over 20 deals on energy supplies, which were recognized by the country's government as illegal until yesterday, as they all were signed with the local leadership but not with Baghdad.

Taghizadeh believes that Tehran's complex foreign relations with international community, as well as failure of Istanbul's Jan. 21-22 nuclear talks, can lead to imposing of new sanctions, including restrictions on Iran's oil export.

Last Saturday, Istanbul ended a two-day talk of representatives of the six international mediators (Russia, China, United States, France, Britain and Germany) with Tehran to resolve the Iranian nuclear issue. EU High Representative for Foreign Policy Catherine Ashton assessed the talks as unsuccessful.

Resolutions adopted by the UN Security Council, as well as additional unilateral sanctions approved by the U.S. Congress and the foreign ministers of all EU countries, were primarily directed against the banking, financial and energy sectors of Iran.

Restrictions imposed by the EU include the ban on the sale of equipment, technologies and services to Iran's energy sector; the same measure refers to the refining industry. New investments in Iran's energy sector have also been also prohibited as a whole. Because of lack of investments due to the sanctions, the production capacity is decreasing, and therefore, Iran cannot effectively increase production.

"Iraq, without any doubt, would be one of the two candidates alongside Saudi Arabia to fill in the gap that Iran's 2 million barrel a day oil export might create," Taghizadeh said.

In October, it became known that Iraq ranks second for its oil reserves in the world, ranking after Saudi Arabia. Experts estimated that reserves of crude in the country increased from approximately 115 billion barrels to 143.1 billion.

Iraq intends to increase production to 8 million barrels per day by 2017, Oil Adviser to Iraqi Prime Minister Thamir Ghadhban said in November 2010.

In addition, Iraq, which is the only member of OPEC not included in the organization's quota system, plans to increase its export quotas. According to a preliminary forecast, revaluation of reserves will considerably strengthen Baghdad's position in OPEC and allow the country to increase the export quota in the future.

Revenues from oil exports account for 95 percent of total revenues of the Iraqi state budget and serve as an important source for the maintenance of national economic development and postwar recovery.

At the same time, oil production in Iran may be reduced due to lack of further investments in new production projects and the dilapidation of the existing oil wells.

U.S. not extending TikTok divestiture deadline, but talks will continue
U.S. not extending TikTok divestiture deadline, but talks will continue
Additional costs could add up to 2.8 billion dollars, Tokyo 2020 says
Additional costs could add up to 2.8 billion dollars, Tokyo 2020 says
Trump to withdraw most troops from Somalia as part of global pullback
Trump to withdraw most troops from Somalia as part of global pullback
Loading Bars
Latest
Azerbaijani banking sector's overall profit drops
Turkmenistan exceeds plan for oil and gas condensate production
Iranian currency rates for December 5
Loan portfolio of trade, services sector in Azerbaijan grows
Кazakhstan Electricity Grid Operating Company opens tender for vehicle maintenance
Foreign investment in Iran increases
GDP growth observed in Turkmenistan
LNG share in Turkey’s natural gas imports reaches 43% in H1 this year
U.S. not extending TikTok divestiture deadline, but talks will continue
ADB allocates $2.5 mln to support Georgia amid pandemic
Italy's retail sales climb higher in October, pushed by demand for electronic equipment
4 regions in coronavirus red zone in Kazakhstan
Iran's UNESCO envoy urges condemnation of assassination of Iranian scientist
France's daily COVID-19 infections continue to fall
Embassy of Japan in Georgia reveals volume of trade turnover between two countries
Arab League welcomes Kuwait's efforts to "heal Arab rifts"
World Bank grants Morocco 400-mln-USD loan
Azerbaijan slows down imports of Turkish-made leather goods
Additional costs could add up to 2.8 billion dollars, Tokyo 2020 says
Trump to withdraw most troops from Somalia as part of global pullback
UK, EU call in leaders to save trade talks
Palestinian teen killed by Israeli forces in protest
Azerbaijan discloses volume of liabilities in banking sector
Heydar Aliyev Center, Flame Towers and Baku Olympic Stadium illuminated with Azerbaijani flag (PHOTO)
NY Times publishes article on the fate of Ciraqli village during Karabakh conflict
South Africa's second largest crude refinery shutdown after blast
1st China-bound freight train departs on 12-day journey from Istanbul
Chip shortages could slow automotive production, VW and suppliers say
Russia, India kick off joint naval drills in Indian Ocean
NCDC to study COVID-19 reinfection cases
Turkey reports over 32,736 new COVID-19 cases
Azerbaijan unveils funds value received by Armed Forces Relief Fund as of December 1
Kazakhstan, Russia agree on measure to restore ecosystem of transboundary rivers
Iran reveals its COVID-19 data for December 4
Kazakhstan's coal extracting venture to buy spares via tender
French activists protest against Amazon's expansion
Azerbaijani, Bulgarian FMs discuss bilateral cooperation
Azerbaijani public reveres memory of martyrs of Karabakh conflict (PHOTO)
Electricity Market Concept Design defines gradual retail market opening in Georgia
Import of rice by Azerbaijan up
Baku Metro opens tender to buy tire connections
French parliament loses ability to be serious partner – Turkish Grand National Assembly
Investments in Georgian Poti Free Industrial Zone diversified by regional countries
Iran's next years budget unlikely to improve economy - Head of Parliament Plan and Budget Commission
Azerbaijan raises value of imports from Lithuania in 10M2020
Big foreign IT companies entering Georgia's market
Azerbaijan's Compulsory Insurance Bureau compensating bankrupted insurer's creditors
Georgia sees increase in tangerines export
Azerbaijan shows video footage from Yanshag village of Kalbajar district (VIDEO)
EDB, KazakhExport to jointly insure exports of insulated cars from Kazakhstan
Georgian Chamber of Commerce working on several projects to help SMEs
Azerbaijan's irrigation company to finance power supply of crop areas
Turkmenistan builts new mosque in Afghanistan's Akina town (PHOTO)
Azerbaijani, Latvian FMs exchange views on current situation in region
International organizations aim to finance road construction and repair in Georgia
Georgia sees increase in imports of dairy products
Azerbaijan unveils 10M2020 railway export operations
EDB to fund investment projects in priority sectors of Kazakhstan Development Bank
Azerbaijani FM receives Belarusian ambassador amid completion of his diplomatic mission (PHOTO)
Azerbaijani Foreign Ministry delivers diplomatic note to French ambassador
Global debt to hit $200 trillion - S&P Global
Turkmengas opens tender for purchase of general equipment
Ankara honors memory of Azerbaijan's martyrs (PHOTO)
First Vice-President Mehriban Aliyeva: We will never forget Patriotic War martyrs (PHOTO)
Azerbaijan applies Lithuanian company's hotel management system project
“Ural Airlines” to take citizens of the Russian Federation out of Azerbaijan
Serbia to pay off loan received from Azerbaijan for road construction
Turkish export cargo to China to pass through Port of Baku
Uzbekistan Airways resumes flights to Kazakhstan’s Nur-Sultan
SOCAR Ukraine's aviation fuel imports for November
Surge in COVID-19 cases reported at Kazakhstan's Tengiz oil field
Turkish president supports Azerbaijani counterpart’s recommendation to France
SOCAR expands its activities in Ukraine
Iran – UK trade could improve by money transfer facilities
Turkey records more Uzbek companies in 10M2020
Budget of Georgia Ministry of Regional Development and Infrastructure to be highest
Rostelecom increases capacity of Uzbektelecom's access to Russian segment of Internet
Central Bank of Azerbaijan eyes to raise funds on Bloomberg trading platform
Azerbaijan was rooting for us – National gymnastics team member (PHOTO)
Azerbaijan ramps up goods exports via stationary transport
UAE’s activity on Turkmenistan’s exchange in November
Azerbaijan confirms 4,267 new COVID-19 cases, 2,566 recoveries
Kazakhstan Development Bank to co-op to promote EAEU integration
Karabakh to become ecotourism center of regional importance - Association of Hotels and Restaurants of Azerbaijan
Oil moves up towards $50/bbl after OPEC+ supply compromise
Number of COVID-19 infections in Russia increases by 27,403 in 24 hours
Turkish minister to get acquainted with construction progress of Kars logistics center
International law firms enter Georgian market
EU urges countries to keep COVID in check over festive season
Baku cathedral parishioners honor memory of martyrs of Azerbaijan's Patriotic War (PHOTO)
Bank of Israel intervenes in foreign exchange market
Turkey, Iran commemorating Azerbaijani martyrs of Patriotic War
Uzbekistan’s volume of media market up in 2021
Kazakhstan, Russia agree on steps to expand co-op in geology
Iran-Iraq Joint Trade Commission to be established soon
Karabakh can become leading IT Hub in South Caucasus, says Azerbaijani analyst
Kazakhstan to launch manufacturing of Russian anti-COVID vaccine before year-end
Ganja honors memory of martyrs of Azerbaijan's Patriotic War (PHOTO)
Substantial NATO-Georgia Package updated at meeting of NATO Ministers of Foreign Affairs
Belonging of Nagorno-Karabakh region determined upon relevant UN Security Council’s resolutions - press secretary of Russian president
All news