WASHINGTON, March 24 (UPI) -- Oil production in Iraq will likely have a dramatic impact on production goals of neighboring oil giants Saudi Arabia and Iran, analysts said in Washington.
Baghdad officials in the wake of successful oil auctions in December said Iraq would one day rival Saudi Arabia in terms of oil production.
As Iraq inches closer to its goal of producing 12 million barrels of crude per day by 2020, pressure to tighten the oil market and raise prices may be undermined, writes energy analyst Greg Priddy in Foreign Affairs magazine.
Iraq added terms to its contracts with foreign oil companies that deal with output cuts, something Priddy, an analyst at the Eurasia Group, says shows Baghdad is wary of an over-supplied market.
Riyadh, he said, may have to discuss production quotas with the main oil cartel to make room for increased oil production from Iraq. Iran, meanwhile, is likely to suffer financially as it presses for ever-increasing oil prices to fill government coffers.
"All of this, of course, is dependent on whether Iraq's internal stability permits large-scale oil development to move at a rapid pace, which remains a big 'if' at this point," cautions Priddy.
