Iraq's Oil Production Unscathed For Now By Trump Travel Ban

  • Premier declines lawmakers’ call to bar Americans from entry
  • U.S. ban to have limited impact on Iraq’s oil industry: Mills

Iraq’s decision not to reciprocate for U.S. President Donald Trump’s visa ban on citizens of seven mostly Muslim countries offers some reassurance for U.S. oil companies working in OPEC’s second-biggest crude producer.

U.S. companies working in Iraq include Exxon Mobil Corp. and oil-service providers Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. Most expatriates in Iraq work on rotation, leaving and returning to the country every few weeks, a routine that any entry ban would have disrupted.

“If the policy was reciprocated, it could have been catastrophic for both countries,” Luay Al Khatteeb, a fellow at Columbia University’s Center on Global Energy Policy, said by phone from London. “It would have affected production.” Iraq pumped 4.61 million barrels a day in December, data compiled by Bloomberg show.

Trump issued the executive order on Jan. 27, in the name of fighting terrorism. Iraqi lawmakers on Monday condemned the move, noting that Iraqi forces are on the front line in the battle against Islamic State militants, and urged their government to reciprocate. Prime Minister Haider Al-Abadi declined to issue a ban.

“We won’t apply the same rules,” the prime minister said. “Fighting terror is a strategic issue for us.”

Exxon, Baker Hughes and Halliburton declined to comment on the Iraqi prime minister’s decision, while representatives for Schlumberger didn’t immediately respond when asked for comment. Crude oil prices have climbed about 2 percent this week after the ban, with Brent rallying 2.2 percent on Wednesday as evidence mounted that producers are making promised output cuts to curb a global glut.


Future Contracts

Trump’s visa ban probably won’t have a direct impact on the companies’ operations in Iraq, as many send their Iraqi staff to other places in the Middle East for training and meetings rather than to the U.S., said Robin Mills, chief executive officer of consultant Qamar Energy in Dubai. “It wasn’t easy for Iraqis to get visas before anyway,” he said.

Mistrust and hostility caused by Trump’s order could harm U.S. businesses’ chances of winning future contracts in Iraq, Mills said. No U.S. oil companies have sought to take part in a bidding round to develop 12 small to medium-sized oil fields, due to take place this year.

The U.S. ban also applies to the semi-autonomous Kurdish region in northern Iraq. Chevron Corp., which is exploring for oil in the Kurdish enclave, said on Monday that it didn’t anticipate any impact from the travel ban.

Kurdish authorities consider the U.S. an ally but expect “more assistance and understanding” from the Trump administration for Iraq and the Kurds, who have been battling Islamic State and harboring refugees, Safeen Dizayee, spokesman of the Kurdistan Regional Government, said Tuesday in a text message.

Of the seven countries targeted by the order, only Iran has so far announced reciprocal measures. Iran’s Foreign Minister Mohammad Javad Zarif tweeted that his country would stop issuing visas to Americans but not bar those who already hold one, describing the U.S. measure as a “great gift to extremists.” No U.S. companies work in Iran’s oil industry or in that of fellow OPEC member Libya.

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