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Iraq's oil prospects: Double the crude, if ...

Wouldn't this article better fit in an issue of, Stupid Planet? It's one thing to constantly extroll the virtues of IBM on this site - but big oil too?
The issue with all moslem produced petroleum is what is really done with the money. With Iraq destined to be a Shia co-conspirator with Iran I'll give you three guesses and the first two don't count. The Sunnis won't influence the politics once they are wiped out. The Kurds, who seem to be the most sane group over there will be subdued eventually and never be allowed to have their own nation.
We may be the great Satan but (our ally?) the Saudis have been pushing Wahabism world wide faster and deeper than MickeyD's ever imagined. That is the key export from the Arabian peninsula - not oil. Do some googling or see "top documentaries" under Islam as a search.
Warmest regards.

The major international oil producers have known about the Iraqi reserves for about eighty years now. They have steadfastly held the production down because doing so is in their best interests to keep petroleum prices up worldwide.

Oil is a resource with inelastic demand. The market will only use so much oil in any given period of time, and even a small increase over that amount causes prices to fall. If your SUV has a 14-gallon tank and gas falls to US$2.00, you are not going to put 28 gallons into your SUV. You probably aren't going to drive to and from work two or three times a day to take advantage of the windfall, either. So the oil majors have learned to keep supply at just the edge of insufficiency -- and prefer to err on the side of too little, as happened in California just last week. This keeps prices high and demand from declining too much. It's a delicate balancing act that is eighty years in the making. Don't imagine the majors are going to give it up at any cost.

Iraq has historically been limited from development through neglect, through political instability, through international sanction. In 2003 with the Bush invasion of Iraq, this program changed to one of active interference and deliberate internal sabotage -- bungled contracts, civil insurrection, and control of the Oil Ministry. The Coalition departure of combat troops from Iraq did not halt this program, nor make it easier for Iraq to exploit and profit from its own resources. The oil majors simply won't deal with Iraq except to handle critical shortages elsewhere in their system, a situation that hasn't obtained since 2003.

Civil insurrection will continue, neglect will continue, the majors will continue to refuse to accept Iraqi oil on the market until there is a great need, and the reserves of Iraq will remain untapped and inaccessible. Even China cannot break this deadlock; their leverage here is slight and there are easier deposits closer that are not wracked with war and insurrection. I expect this situation to continue until oil shortages become more general, in about thirty years, in which case Iraq can expect to be invaded and conquered again for its oil. This time, I expect a far more brutal occupation and a far higher death rate.

You must come to understand that this isn't about oil, it isn't about national development, and it isn't even entirely about money. It's about power, and the power to extract money from desperate people. The power to make people desperate is what keeps the petroleum markets operating at the efficiencies they do, and have, for eighty years and more. Don't imagine it's about anything else.

As the affordablecomputerguy shows, religion is also a way to make people desperate. He's about as desperate as they come, which means he is going to go the way the oil majors suggest. He can't help himself; he's lost in his emotions, and that's all the oil majors need to make sure his income becomes theirs.

Don't believe me? Go review Iraqi and world oil production figures from the 1920s forward. Then take a look at the worldwide increase in petroleum prices over that same period. Then you can tell me what happened to both in 2003. Though I think you'll be too astonished to speak, frankly. Until you study this industry you can't know what it has really been doing behind the scenes for nearly a century. You might not believe it at all.

There are many strange conclusions in progan01's posting.

First, it looks at demand only from the US viewpoint. The fact is that oil demand globally will continue to go up. While in the US it's gone down by about 10% in recent years, in both China and India demand is skyrocketing and more than makes up for the US decrease (see, for example, https://www.wolframalpha.com/input/?i=chinese+oil+consumption ). Both China and India governments spend a considerable amount of money subsidizing gasoline and other petroleum products in their countries. We don't know about China because they keep their spending secret, but government in India runs huge deficits keeping prices low. These governments would love nothing better than for more oil to come onto the global market so they could spend less money on this. And with cheaper gas there are literally hundreds of millions of people in these countries who would buy scooters and cars to use it.

progan01 is somewhat correct about the history of oil production in Iraq. When Sadaam was in power, all he cared about was getting enough oil production to pay for his exorbitant lifestyle and pay off the elites to keep him in power. He cared little about the living conditions of his people. So when he came to power he allowed the infrastructure to collapse and oil production to decrease. What hinders Iraqi oil output today is that poor infrastructure, along with the lack of a first-world economic system to produce it. There's no conspiracy inside or outside the country, just general ineptness and ancient tribal conflicts that were only increased by religious differences in past centuries.

In some places in the Muslim world religion is used to hold back the people by the people in power. But it doesn't explain Kuwait, Saudi Arabia, or the United Arab Emirates, all of which have very high standards of living.

"So the oil majors have learned to keep supply at just the edge of insufficiency -- and prefer to err on the side of too little, as happened in California just last week." This is a very strange statement. In a free market, supply is always just at the edge of insufficiency -- but so is demand. It's how prices are made. Raise the price even a little, demand goes down, and suddenly you have a small surplus of supply. And the idea that the oil companies caused the recent oil shortage in California is false. They've wanted to build new oil refineries in the state for decades, but have been denied by the state and federal governments. Instead, four refineries have closed in past years, all without new capacity coming online. As a result, all the refineries in California are always operating at peak capacity, and when one went down, gas shot up as a result.

The idea that there is all this money to be extracted from the poor by the oil corporations is nonsense. If you want to make money from the masses, it's far better to raise their standard of living first. The US, Europe, and Japan are responsible for tens of billions of dollars in profit per year for oil corporations, far more than they get from the other regions of the world. If true power comes from making people desperate, why have the governments of India, China, Brazil, South Korea, and Taiwan been working so hard to improve the living standards of their citizens?