How Iraqi Oil Is Changing the World - By Stephen Glain | Foreign Policy - 0 views
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For decades, Saudi Arabia has served as the world's central banker of oil supplies. In unstable times, most famously in the wake of Iraqi's 1990 invasion of Kuwait, it has drawn from its spare production capacity of some 1 million barrels to bring prices to heel.
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Iraq's revival as a prominent oil exporter is bound to reshuffle a careful power balance in the energy-rich Arab world, particularly between bitter rivals Saudi Arabia and Iran. Saddam Hussein's 2003 toppling created a vacuum that both sides rushed to fill, for example deploying proxy forces at the height of Iraq's sectarian civil war. OPEC is another battlefield for the Saudi-Iran rivalry, and the Saudi kingdom is in no hurry to lose its uncontested status as No. 1. Now, as Iraq stabilizes politically and slowly rebuilds its oil-production capacity, both sides will have to accommodate a more assertive Baghdad. Even if oil production doesn't reach the Iraqis' goal, it will likely be higher than the approximately 1.7 million barrels per day that Iraq was producing just prior to the U.S. invasion.
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quota smashers like Iran and Venezuela, who routinely oversell to pay for their costly entitlement programs