Iraq War Paying Off — for China

By:  Jack Kenny
06/03/2013
       
Iraq War Paying Off — for China

Remember those assurances that the Iraq War would pay for itself, once those oil revenues began gushing forth from a liberated Iraq? Well, a decade later the Iraq War is paying off, after all —for China.

"We lost out," said Michael Makovsky, a former Defense Department official in the Bush administration. "The Chinese had nothing to do with the war," he told the New York Times, "but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply."

China is the biggest customer of Iraq's oil, buying nearly 1.5 million barrels a day, close to half the oil Iraq produces, the Times reported. Beijing is looking to increase that share as it bids for a stake now owned by Exxon Mobil in one of Iraq's largest oil fields.

"The Chinese are the biggest beneficiary of this post-Saddam oil boom in Iraq," said Denise Natali, a Middle East expert at the National Defense University in Washington. "They need energy, and they want to get into the market."

With an estimated 143.1 billion barrels in extractable oil reserves, Iraq is the second largest exporter of oil among the Organization of the Petroleum Exporting Countries (OPEC), trailing only Saudi Arabia. China has recently become the world's biggest importer of oil and is investing in oil and gas fields around the world, having spent $12 billion in that effort in 2011, according to the U.S. Energy Department. More than half of China's oil imports come from the Middle East, even while the West's economic sanctions against Iran over that nation's nuclear program have reduced the amount of oil available from that source.

Iraq was already one of the world's leading exporters of oil before the U.S.-led sanctions against the Saddam Hussein regime over violations of UN resolutions crippled the nation's economy, including its oil industry.

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