{"id":4175,"date":"2014-06-20T15:25:19","date_gmt":"2014-06-20T14:25:19","guid":{"rendered":"http:\/\/www.theoillamp.co.uk\/?p=4175"},"modified":"2014-06-20T15:25:19","modified_gmt":"2014-06-20T14:25:19","slug":"one-thing-learnt-week-iraqi-oil","status":"publish","type":"post","link":"https:\/\/www.theoillamp.co.uk\/?p=4175","title":{"rendered":"One thing we have learnt this week- Iraqi oil"},"content":{"rendered":"

Oil and particularly Iraqi oil have been in the news this week. Of course first and foremost what is happening in Iraq is a humanitarian crisis.\u00a0 Up to half a million Iraqis have fled the fighting, although there were reports of people beginning to go back to Isis controlled areas.\u00a0 Of course they may not like what awaits them<\/a>.\u00a0 People who live under strict Islamic law tend to resent it pretty quickly.<\/p>\n

We mentioned the Arab Spring in our book<\/a>.\u00a0\u00a0 We wrote (and it seems very apt to say so now);<\/p>\n

“The whole \u201cArab Spring\u201d has been totally unpredictable so far but one possible scenario is that the civil war in Syria spreads to its neighbours (Lebanon and Iraq) and then beyond and becomes a general conflict between Shia and Sunni.<\/em>”<\/p>\n

We went on to write;<\/p>\n

“Whilst Shias are a minority overall in the Middle East they are very widely dispersed. In Iraq they make up a majority and there are large populations in the Gulf States and<\/em>
\nSaudi Arabia. This scenario whilst looking relatively unlikely would lead to very major fossil fuel supply disruptions.<\/em>”<\/p>\n

This no longer looks so unlikely.<\/p>\n

If the invasion in 2003 was about oil it has been modestly successful.\u00a0 The graph shows production as far back as the BP Statistical Review of World Energy allows.<\/p>\n

\"iraqi<\/a>The IEA world energy outlook 2012 makes it plain that we are relying on Iraqi oil production going forward.<\/p>\n

“Without this supply growth from Iraq, oil markets would be set for difficult times, characterised by prices that are almost $15\/barrel higher than the level in the New Policies Scenario by 2035.<\/em>”<\/p>\n

Disruption to the Iraqi oil supply seems certain although it has had little impact on the price of oil so far.\u00a0\u00a0 But OPEC may have to increase production to make up for loss of Iraqi oil and the lack of oil coming out of Libya.<\/p>\n

The whole situation is a huge mess and we have reached the stage where there probably is no solution (in human terms) and Isis are definitely waging a sectarian war against Shia who they regard as infidels. A link to some more background on the situation is in this previous post I wrote<\/a>.\u00a0 Here are some suggestions on what we should or not do.<\/p>\n