US Seeks to Reclaim Influence in Iraq's Oil Industry Amid Shifts in Global Power Balance

The oil industry in Iraq has become a hotbed of competition between major powers, including the US, Russia, and China. According to an analysis by Simon Watkins for OilPrice, Washington is attempting to strengthen the position of American and Western companies in the Iraqi oil industry by leveraging Moscow's gradual retreat and Beijing's limited room for maneuver.

Iraq holds approximately 145 billion barrels of proven oil reserves, making it one of the world's largest oil reserve holders. The country's low production costs, around $2 to $4 per barrel, also make it an attractive location for foreign investment.

Russia and China have been expanding their presence in Iraq's energy sector, with Russian companies holding a significant share in the Kurdistan Region's oil sector and Chinese firms playing a major role in southern Iraq. However, US sanctions on some Russian companies, combined with pressure on networks linked to Iran, have created an opportunity for American and European companies to return to major Iraqi oil projects.

ConocoPhillips has recently acquired a 42% stake in BP Energy Kirkuk from BP, allowing it to participate in the development of five oil fields in the Kirkuk region. The project aims to produce around 328,000 barrels per day initially, with potential to increase to 450,000 barrels per day over the next two to three years.

The US is also strengthening its position in southern Iraq through Chevron's entry into the West Qurna 2 project and negotiations to develop the Nasiriyah field. These developments are crucial as Baghdad aims to increase oil production to 8-10 million barrels per day within six years, relying on foreign investment and infrastructure development.