The Prospects for the Oil Sector in the Iraqi Economy after Sanctions

Abstract

Iraq should not depend on its oil sector at the expense of the other economic sectors. This should not, however, be understood as a request to reduce oil production. Iraqi oil exports can play an important role in providing the capital necessary for the development of Iraq's industrial and agricultural sectors, in order to increase the contribution of these sectors to the real gross domestic product. The whole Iraqi economy, including the oil sector, must be organised in such a way that it becomes open, to some extent, to direct foreign investment. Iraq should target higher oil export revenue, and hence it will be able to pay its foreign debt within 25 years at the most. The higher oil export revenue can be obtained through a policy of moderate prices and faster growth of oil production.