Brent traded at its highest level since September as militants in Iraq seized more territory and President Barrack Obama warned that the crises may spill over into other countries. Fighters from the Islamic State in Iraq and the Levant took control of Iraq`s border crossing with Jordan and Syria.
Iraq pumped 3,3 million barrels a day last month. Saudi Arabia is the largest producer in the 12-member Organization of Petroleum Exporting Countries. U.S Secretary of State John Kerry arrived in Baghdad to try to get political leaders to set aside sectarian divisions and confront the growing threat.
John Kerry will spend the day meeting with Prime Minister Nouri al-Maliki, as well as ministers and party leaders. But why do the U.S and John Kerry spend so much time and money on this case? Kerry said at a press conference that they want a government in Baghdad «that is prepared to represent all of the people of Iraq, that is prepared to be inclusive and share power».
The U.S didn`t invade Iraq to stop and evil tyrant and spread democracy. There were no weapons of mass destructions, and all of the terrorists that had been in Afghanistan fled to Pakistan. Not Iraq. The U.S went to Iraq for oil.
Back then, the U.S oil production was falling, but now it is rising. From 1970 to 2008, oil production fell from 9,6 million barrels per day to just 5 million barrels per day. Michael Simmons cast doubt on the actual size of Saudi Arabia`s reserves in his book from 2005, so it was not only the U.S either. M. King Hubbard`s «Peak oil» theory and breakneck emerging market growth, explain even more what happened in Iraq.
Vice President Dick Cheney had previously been the CEO of Halliburton, and made about $40 billion from the Iraq war. All this makes it hard to belive that the U.S was not in Iraq for the oil. But, did the U.S get all the oil? Nope.
Iraq is the second largest producer in OPEC and the country`s oil production hit 3,25 million barrels per day last year. A level not seen since before 1990, but the U.S oil imports from Iraq are actually down.
The U.S imported 725,000 barrels per day from Iraq in 1999, but now it is only 340,000 barrels a day. So, if Iraq is producing more oil than it has in decades, where is all the oil going? The oil is going to China.
China`s crude imports from Iraq increased by 31% year-over-year to about 600,000 barrels per day in the first four months of 2014, and that`s twice as much as the U.S import from Iraq. Up from almost nothing a decade ago.
Iraq`s oil production is expected to reach 8 million barrels by 2035, and that`s not all: they forecast that 80% of Iraqi production would go to China. Some investors say that Baghdad to Beijing is the new Silk Road of the global oil trade.
China National Petroleum Corp (CNPC) has invested $4 billion in the Iraqi oil industry. They produced 299 million barrels from the country last year. Almost one-third of its overseas output. PetroChina and Sinopec have invested billions of dollars in Iraq as well, acquiring stakes in some of the country`s largest oil fields. So, why do the U.S and John Kerry spend so much time and money to try to stabilize Iraq?
The U.S came uninvited and the American people don`t want to be there, nor do the Iraqi people want the American people to be there. The U.S has sacrificed much so far; 4,500 dead American soldiers and about 120,000 dead Iraqi civilians. About $800 billion in upfront costs, with additional $1 trillion in military pensions, disability payments and debt service. Is it worth it?
Saddam could have stopped the mess in Iraq, but he is dead. The U.S killed him. Now, the Sunnis, the Shiite, and the Kurds can do it all alone. There is nothing America can do to bring two warring Islamic factions together or redeem its credibility. If someone should spend time and money on this mess, it should be China.
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