The U.S. Power Play in Iraq That Moscow and Beijing Didn’t See Coming
SPR Sinks Toward Operational Minimum as U.S.
Crude Inventories Build Global battery-storage capacity surged to… Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author.
He was Head of Forex Institutional Sales and Trading for… As Russia remains occupied with its war in Ukraine, Iran focuses on defending its territory against U.S.
and Israeli attacks, and China maintains its involvement in both conflicts under the bar that would trigger direct conflict with America, Washington is leveraging its position in Iraq.
and its allies have taken on further urgency as Iraqi Prime Minister Ali al-Zaidi announced last week that the country plans to raise oil production to between 8 million barrels per day (bpd) and 10 million bpd within six years -- so the U.S.
and its allies want to be best positioned to benefit from that.
So, what has Washington been up to in recent weeks and why? Despite the recent damage done to its oil sector by the ongoing conflict in the Middle East, Iraq has four key qualities that all three global powers remain keen to use to their own advantage.
First, it is still one of the biggest oil prizes in the world, with a very conservatively estimated 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East’s total, and the fifth biggest on the planet), according to the Energy Information Administration.
It is extremely likely that it holds much more oil than this, and the US$2-4 per barrel lifting cost is the joint lowest in the world, along with Iran and Saudi Arabia.
Second, it occupies the geographical heart of the region, lying west of Iran, north of Saudi Arabia and Kuwait, east of Jordan and Syria (with its long Mediterranean coastline offering access to further critical sea routes), and south of Turkey (affording an entry into the European continent).
Third, it remains a key member of the ‘Shia Crescent of Power’ geopolitical arc that stretches from Iran through Iraq, Syria, and Lebanon, where Shia communities and Iran-backed groups exert significant influence over regional politics, economics, and security.
And fourth, it has for years been the key conduit through which Iran has been able to move its own sanctioned oil out into the world under the guise of non-sanctioned Iraqi oil, which has ensured its economic survival, despite swingeing international sanctions.Related: Satellite Images Show Seven Tankers Loading Iraqi Crude at Once Following the U.S.’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA, or colloquially ‘the nuclear deal’) in 2018, China and Russia moved quickly to exploit perceived American weakness across the Middle East.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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