Oil and Terror: ISIS and Middle East Economies - 0 views
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ISIS's economic cost is significant not just for Iraq but also other Middle Eastern countries.
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Iraq has the fifth largest oil reserves in the world and third highest in the Middle East after Saudi Arabia and Iran.
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Though currently the Iraqi government has reserves and surplus funds, mounting expenditures and falling oil prices has economists to project that Iraq will run a deficit next year.
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Thankfully, 6 of 8 Iraq’s major oil fields lie in the Shia South, which is unlikely to come under ISIS control.
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Turkey runs a huge trade surplus with Iraq, which is likely to slow down dramatically due to lower demand from Iraq.
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Iran’s position seems to be the trickiest of all in that its interests align with those of the US in its fight against ISIS
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Falling oil prices have definitely curtailed Iran’s ability to intervene without serious consequences for its economy. Iran needs oil prices well above USD $100 for it to balance its budget,
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Any cooperation between Iran and the US over ISIS could lead to a gradual withdrawal of sanctions, which would allow Iran to sell its oil on the open market and generate revenue. The flip side is that Iran’s oil would surely depress oil prices further.
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it finds its interests are aligned with those of Iran, a traditional foe, both of which are against ISIS.
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Russia needs oil prices near USD $100 to balance its budget and Iran needs high oil prices to support its nuclear program.
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Regionally, ISIS will disrupt and degrade the economy of several states, and that in turn may lead to further political chaos -- which is precisely ISIS's goal.