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Development Topic Analysis - Essay Example

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Apart from influencing the world’s economy, Iraq oil reserves are vital in its political development and that of other countries. Iraq’s oil reserves are ranked second after those…
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Development Topic Analysis
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Download file to see previous pages In addition, Iraq is on record as the first oil producing country to nationalize part of its oil reserves in 1961. The Iraq National Oil Company has made significant contributions in the formulation of international oil policies and it is expected to contribute more if there will be political stability in Iraq (Alnasrawi 7).
Iraq’s oil production is estimated to be over 2.1 million barrels per day (bpd). This production is roughly 2.5% of the total oil supplied around the world. Going back to the trend of Iraq’s oil production, statistics indicate that Iraq produced an estimate of 4 million bpd in 1979, which placed it third after Iran and Saudi Arabia. Before the Iraqis invasion of Kuwait, Iraq’s oil production averaged 3.5 million bpd. This production began to reduce in the 1990s after the Gulf war and after the introduction of international sanctions against Baghdad. By the time the US was invading Iraq in March of 2003, Iraq’s oil production averaged 2.6 million bpd (Alnasrawi 13).
After the US invasion, production of oil in Iraq has declined remarkably to estimates of 1.5 million bpd in 2003, 2.00 million bpd in 2004, and in 2005, oil production was 1.8 million bpd. In 2006, oil production averaged 2.06 million bpd; this was below the government’s target of 2.5 million bpd. Despite the increased global oil prices, Iraq has managed to meet its budget estimates (Gordon 1-70).
It is evident that Iraq’s oil market has suffered a lot in the last three decades. Experts point out that declines in Iraq’s oil production in the last five years is due to poor management on oil reservoirs. In addition, these declines are as a result of poor maintenance of pipelines, pumping stations, and other infrastructure. A situation of political instability in Iraq may be associated to problems facing Iraq’s oil market. Since 2003, there has been remarkably less development on potential oil reserves, which implies that there is the lack of new oil ...Download file to see next pagesRead More
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