Iraq Oil Report

Barack Obama’s approach to Iraq is strikingly similar to that of the Bush administration and John McCain. In theory, the addition of Joe Biden to Obama’s ticket could change this, but over the last weeks and months there have been interesting moves by Biden to remove most traces of his “Iraq plans” from the public domain.

During his recent trip to the Middle East, Obama revealed an extremely dated way of thinking about Iraq, more or less reiterating the Iraq cosmology of those Bush administration officials that have been in charge since 2003. For example, Obama opined: “I think resolving the big issues like the hydrocarbons law in a way that gives Sunnis the impression that their voice is heard, that’s going to be important.” In fact, the real problem with regard to the hydrocarbons law is that two Kurdish parties insist on the right of federal regions to sign contracts with foreign companies, whereas almost all the other parties – in this case Sunnis and Shiites alike, and including some of those Shiites that normally are quite pro-Kurdish – favor a more centralized system, writes Reidar Visser for historiae.org.

Iraqi businessmen are confident that Iraq’s commercial climate is edging towards normalcy but also know just how quickly it can all go wrong again.

The 2003 US-led invasion of Iraq triggered sectarian clashes that at their height were killing hundreds of people a day, ground business to a halt, and many executives fled to neighboring Jordan.

“We have very big strategic plans in Iraq, which include electricity and oil and the refineries, and also other factories which will bring good benefits to Iraq,” Sabah al-Moussawi, a construction magnate, told AFP. “But everything needs to be changed.”

Oil fell $6.59 Aug. 22, or 5.4 percent, to $114.59 a barrel, the biggest drop since Dec. 27, 2004. In dollar terms, it was the biggest decline since Jan. 17, 1991, when U.S.-led forces expelled Iraq from Kuwait, Bloomberg notes.

The price swings indicate that fundamental factors aren’t the only influence in the market, said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

“That’s a huge move,” he said.