A Crude Look at the Wealth of Iraq

 

Henry Thompson

 

Over the next two decades, total world energy consumption will double with serious energy alternatives decades away.  Energy prices and the energy share of national income will steadily increase.  Monopoly profits will go to the owners of oil.  The Arab Gulf has 65% of proven oil reserves in the world, and Iraq 12%.  Iraq can produce 2 billion barrels per year.  At $100 per barrel, that oil will sell for $200 billion.  The population of Iraq is 24 million making that income $8000 per person.  Iraq selling a quarter of its proven reserves at an average price of $100 for the next 20 years would generate 90 billion x $100 = $9 trillion.  If the population of Iraq grows to 30 million that would be $300,000 per capita for 20 years, or $15,000 annual income per capita.  The total value of Iraq potential oil reserves at an average profit of $75 per barrel over next 100 years is 360 billion x $75 = $27 trillion or $900,000 per capita, not including natural gas revenue that lately about equals oil revenue.  Most of Iraq has not been explored for gas or oil.  For the Arab Gulf region, proven oil reserves are 195 trillion barrels.  Selling this oil at an average profit of $75 per barrel for the next 100 years will generate $15,000 trillion income.  If half of that is invested, it would grow to $7,500 trillion or a quarter of the present total capital assets in world.