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> At the conference this weekend it was suggested that with investment Iraq > may be able to increase pumping capacity up to 8 or even 12 million barrels > a day of oil, allowing it to generate large revenues for the civilian > program. > > I was puzzled by this because my understanding of OPEC is that Iraq would > not be allowed to pump that much oil, nor would any OPEC producer. > > In addition, wouldn't increasing the volume of Iraqi oil result in a > decrease in price of oil, negating any extra revenues which could > be earned from the larger volume? > > I've wrestled around with the increasing oil sales and can't really see any > way Iraq could earn more from oil sales in the next few years than $16 > billion apart from an increase in the oil price. Thanks Richard, Yes, I think that you're right about the problem of OPEC quotas. Currently Iraq is not required to adhere to quotas, a peculiar feature of the sanctions that George Joffé mentioned. So, the questions are, if Iraq was negotiating with OPEC: (i) would it ever be allowed 12 million bbl/day? and (ii) what would happen to the price of oil? The answer to both depends on the growth of global demand for oil. Economies are still very dependent upon the use of oil as a fuel. Therefore economic growth still depends heavily on additional use of petroleum. As economies grow, the demand for oil increases, increases the price of oil unless supply also increases. So, Iraq's exports could grow to meet demand growth. It is also possible that Iraq's oil exports could grow without growth in world demand. Iraq could argue that it deserves a bigger slice of the "pie" of OPEC exports. This would require other countries to reduce their own exports if the aim is for OPEC to maintain a constant level of export. This, I think, is a less likely scenario as (i) it's always harder to convince people to accept less so that others can have more; and (ii) world oil demand is likely to grow. I hope that this helps, Colin Rowat Iraq Sanctions Project Coordinator Center for Economic and Social Rights 162 Montague Street Brooklyn, NY 11201 Tel: (718) 237-9145 x 19 Fax: (718) 237-9147 Mob: (917) 517-5840 E-mail: firstname.lastname@example.org Mob. mail: email@example.com URL: http://www.cesr.org/isp -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email firstname.lastname@example.org Full details of CASI's various lists can be found on the CASI website: http://www.casi.org.uk