Friday, December 14, 2007

Iraqi oil production hits prewar levels

Put increased oil output down as yet another benefit of the improving security situation in Iraq.

The IEA said Iraqi crude production is now running at 2.3 million barrels per day, compared with 1.9 million barrels at the start of this year.

This could be a biggie, for two reasons.

1. Oil infrastructure -- consisting as it does of a lot of pipelines running through the middle of nowhere -- are particularly susceptible to sabotage. Security measures help, but a sustained decline in such sabotage only comes about when fewer people feel like sabotaging the equipment. So it's an indicator of changing attitudes among Iraqis, not just tighter security measures.

2. Increased production means increased oil revenue, which means increased revenue-sharing between Sunni, Shiite and Kurds. A sustained increase and equitable sharing would give all sides a big financial incentive to seek peace in order to keep the largesse flowing. And payments to Sunnis and Kurds help buy goodwill and give the minority groups -- particularly the Sunnis, who have few oil deposits in their territory -- incentive to remain a part of Iraq rather than attempt to go their own way.

As I've noted before, the improved security is only as strong as the allegiance of key Sunni tribal leaders. Recently discovered mass graves in former Al-Qaeda strongholds graphically demonstrate why those tribal leaders switched sides -- AQ is as self-destructively deadly as Ebola. But there's nothing keeping them from resuming their own insurgency if they are not satisfied with the benefits of cooperation. Keeping them on board remains the key task in Iraq.

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