At the start of July it was reported that Iraq wants to boost its oil production to increase its revenues before the global economy begins moving away from petroleum. Prime Minister Ali al-Zaidi said that he set a goal of 7 million barrels a day of output in three years. The premier also told the media that a 10 year economic plan is being created whose goal is reducing the budget’s reliance upon oil from 90% down to 45%. This isn’t much different from all the previous Iraqi PMs that have all spoken about dramatically increasing the oil industry to diversify the economy. The problem is Baghdad has never achieved any of these goals.
Since Iraq opened up its oil industry to foreign investment in 2009 it has been talking about becoming one of the largest producers in the world. In December 2009 for instance Oil Minister Hussein al-Shahristani predicted that Iraq could reach 12 million barrels a day by 2015. By 2010 that went down to 8 million barrels by 2017 which was then extended to 2025. In 2012 the Oil Ministry was talking about 6 million barrels by 2020 (1) or 9 million by 2018. (2) By 2019 the goal was 7 million by 2022. The next year the government wanted 8 million barrels by 2027. In 2025 before the Iran War began the country was averaging 4.5 million barrels far below any of the forecasts. That was due to a severe lack of infrastructure, red tape and corruption which greatly frustrated international companies and led several of them to leave the country. PM Zaidi believes he can overcome those obstacles and almost double production in just a few years which seems completely unrealistic given this history.
|
Year |
Predicted Oil Production |
Actual Oil Production |
|
2015 |
12 Mil/Bar/Day |
4.0 Mil/Bar/Day |
|
2017 |
8 Mil/Bar/Day |
4.4 Mil/Bar/Day |
|
2018 |
9 Mil/Bar/Day |
4.6 Mil/Bar/Day |
|
2020 |
6 Mil/Bar/Day |
4.3 Mil/Bar/Day |
|
2022 |
7 Mil/Bar/Day |
4.5 Mil/Bar/Day |
|
2025 |
8 Mil/Bar/Day |
4.7 Mil/Bar/Day |
|
2027 |
8 Mil/Bar/Day |
? |
|
2029 |
7 Mil/Bar/Day |
? |
More importantly this reveals how the Iraqi elite think. The country is the most oil dependent in the world. Almost the entire government budget relies upon petroleum revenues. Instead of taking that money and diversifying the economy which would greatly help the population by providing jobs Baghdad has constantly said it wants to become more oil dependent. That’s because oil doesn’t just fund the government but is a major source of graft for the ruling parties. They have no real incentive to change despite all the announcements that the state will work on other sectors of the economy. For them oil has always greased the gears of the country and will continue to do so into the future.
PM Zaidi is just the latest Iraqi leader who promises that he will dramatically grow the oil business and use it develop the rest of the country. He’s likely to face the same fate which is disappointment as production will likely only slightly go up in three years while the nation remains reliant upon the industry.
FOOTNOTES
1. Neuhof, Florian, “Iraq sets bar lower on oil output and looks to attract foreign firms,” The National, 10/3/12
2. Said, Summer, “Iraq to invest up to $150B to lift output capacity,” Wall Street Journal, 11/12/12
SOURCES
Al Alam, “Al-Zaidi’s Ten-Year Plan to Reduce Oil Dominance to 45%: Prospects for Success and Key Challenges?” 6/24/26
Bas News, “Iraq Parliament Backs More Oil Production Plans,” 8/26/23
BBC, “Iraq oil capacity ‘to reach 12m barrels per day,’” 12/12/09
Dourian, Kate, “Iraqi oil production rebounds in 2022, but faces headwinds in 2023,” Iraq Oil Report, 1/19/23
International Trade Administration, “Iraq Country Guide”
Neuhof, Florian, “Iraq sets bar lower on oil output and looks to attract foreign firms,” The National, 10/3/12
NINA, “Al-Zaidi: We aspire to raise Iraq’s oil production to 7 million barrels per day,” 6/27/26
Reuters, “UPDATE 2-Iraq oil output may hit 8 million bpd by 2017,” 11/29/10
Rudaw, “Iraq targets oil production of 7 million bpd by 2022,” 2/15/18
Said, Summer, “Iraq to invest up to $150B to lift output capacity,” Wall Street Journal, 11/12/12
Salem, Amr, “Iraq seeks to raise oil output ahead of global energy transition,” Iraqi News, 7/2/26
Shafaq News, “Iraq held 5.2% of global oil output in 2025,” 3/29/26
U.S. Energy Information Administration, “Iraq is second-leading contributor to global liquids supply growth in 2015,” 2/29/16
- “Iraq’s oil production has nearly double over the past decade, 1/11/19
Van Heuvelen, Ben, “Iraqi production rises in 2025 as OPEC-plus eases quotas,” Iraq Oil Report, 1/25/26
Worldometer, “Iraq Oil”
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