Iraq Could Be Oil Market Linchpin.
As hard as it may be to imagine, given today’s rock bottom oil prices and abundant supplies, the world may still struggle to bring enough oil online over the next few decades to meet long-term demand.
Global economic growth over the next several decades is predicated on continued growth in oil supplies. But meeting long-term supply needs will hinge heavily on one country in particular – Iraq.
Just two years ago, the International Energy Agency (IEA) predicted that Iraq would be able to double its oil production by the end of the decade, raising output to 6.1 million barrels per day. Even more compelling is the fact that the IEA also believes that Iraq will make up an inordinate share of global supply growth over the long term – more than U.S. shale, more than other OPEC members.
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But that looks increasingly unlikely for two major reasons. First is the onslaught from ISIS, which has torn the country apart. The militant group’s advance has been halted and is slowly being rolled back, but nevertheless, the presence of violence and the lack of security are already deterring investment in new production.
