China’s Iraq Oil Strategy Comes Into Sharper Focus
By Chris Zambelis
March 19 marked the ten-year anniversary of the United States invasion of Iraq that toppled the government of Saddam Hussein. Although the international community continues to focus on the violence plaguing post-war Iraq and the country’s oil production capacity, changes in Iraqi foreign policy in the post-Saddam era have received far less attention. Endowed with the world’s fifth largest proven reserves of crude oil and sizeable natural gas deposits, Iraq is a critical source of energy for the world (U.S. Energy Information Administration, Iraq Country Data, April 2013). It is no surprise that China, a major energy importer whose reliance on Middle East oil continues to grow, is watching developments in Iraq closely. Although years of economic sanctions, war and mismanagement have devastated Iraq’s energy sector, an influx of foreign investment and efforts by the Iraqi government to improve the energy infrastructure have boosted Iraq’s oil production to the highest levels in decades. A search for customers has inevitably led it to China, which imports an estimated 500,000 barrels of oil per day (bpd) from Iraq (Xinhua, April 5). Indeed, Iraqi Oil Minister Abdul Kareem al-Luaibi recently announced that Iraq is pursuing a major long-term agreement with Beijing to deliver oil to China: “The Chinese companies are considered as strategic partners to Iraq in aspects of extracting and marketing crude oil through their active participation to develop the Iraqi oilfields” (Xinhua, April 5; Bloomberg, April 3, Reuters, March 5).
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