Report: Iraq And Iran Are Plotting An Oil Revolution To Challenge Saudi Arabia's Dominance In OPEC

Iraq And Iran Plot Oil Revolution In Challenge To Saudi Arabia -- The Telegraph

Iraq's goal of pumping 9m barrels a day of crude could be a game changer for oil prices and British companies.

Iraq is poised to flood the oil market by tripling its capacity to pump crude by 2020 and is collaborating with Iran on strategy in a move that will challenge Saudi Arabia's grip on the Organisation of Petroleum Exporting Countries.

"We feel the world needs to be assured of fuel for economic growth," Hussain al-Shahristani, Deputy Prime Minister for Energy in Iraq told oil industry delegates attending a Chatham House Middle East energy conference.

Al Shahristani said on Tuesday that Iraq plans to boost its capacity to produce oil to 9m barrels a day (bpd) by the end of the decade as Baghdad rushes to bolster its economy, which is still shattered by war and internal conflict. Iraq was producing 3m bpd in December, according to the International Energy Agency.

Read more ....

Update: OPEC says can handle extra oil from Iran, Libya, Iraq -- Reuters

My Comment: I am skeptical that Iran and Iraq will be able to disrupt oil markets to such a level. The world's new emerging economies (China, India, Africa, etc.) will be the ones who will be absorbing these oil supply increases (if it happens), and the development of new fracking technologies will probably shift other countries away from OPEC oil imports. In addition .... even if Iran and Iraq agree to a common oil policy .... Iraq will still have problems to increase their supplies .... the Syrian civil war spillover into Iraq is hindering the development of new oilfields and pipelines, and the Kurds in the north of Iraq are pursuing their own independent oil policies.

It should also be noted that Saudi Arabia is in a far better position to absorb oil supply/price fluctuations than Iraq and Iran who are more dependent on high oil prices to finance their government budgets. In fact .... I would venture that from the Saudi perspective .... they are probably daring the Shiite dominated governments in Iraq and Iran to bring it on.