Iraq produces 2.5m barrels per day, compared with Iran’s 3.7mbd. Mr Shahristani says that Iraq can achieve 12mbd by 2017, a level that would rival Saudi Arabia, but analysts are sceptical.
“We don’t believe that’s achievable,” says Patrick Gibson, oil supply analyst at Wood Mackenzie, a consultancy, adding that the main constraints are simply logistical. Iraq lacks the infrastructure and export facilities to make such a quantum leap.
But Mr Gibson says that 7.5mbd by 2017 is possible, while 5.3mbd is a “fully risked estimate”. Meanwhile, he added: “We don’t see Iranian production going anywhere in the next five years.”
On any view, Iraq will probably overtake Iran and become Opec’s second-biggest producer in the next five years. If so, Iraq’s status will have to change.
The country has not been subject to Opec’s production quotas since Saddam Hussein’s invasion of Kuwait in 1990. As Iraq’s output grows, this position will become untenable.
Dr Takin said the crucial moment will come when Iraqi output reaches 3.5 or 4mbd. “Then they will say to the Iraqi minister, ‘Your Excellency, the time has come for you to join our quotas. If you don’t, then prices will fall and we’ll all lose’."
Tuesday, October 12, 2010
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