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The Real Reason Iraq's Oil Boom Has Stalled

Iraqi crude at Al Basra oil terminal in the Northern Arabian Gulf
Iraqi crude at Al Basra oil terminal in the Northern Arabian GulfPhotograph by Charles Crowell/Bloomberg

There’s an old saying among oil analysts that the last barrel of oil in the world will be produced in Iraq. It’s a mixed compliment that hints at the paradox of the country’s oil industry. On one hand, Iraq is home to a vast amount of relatively easy-to-extract oil: Its 137 billion barrels of proven reserves account for about 9 percent of the world’s oil. On the other, there always seems to be something getting in the way of producing it: war, government bureaucracy, sanctions, more war.

A decade after the U.S.-led invasion, Iraq is now producing about a million more barrels per day than it was on the eve of Operation Iraqi Freedom. That’s a 35 percent increase, close to record highs for the country.