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Iraq's return to petroleum prominence was not supposed to take this long. Before the U.S.-led invasion, officials in President George W. Bush's administration said that the country's oil exports, long hampered by international sanctions, would recover quickly and possibly even pay for the war. Like much in the Iraq war, that didn't work out as planned, and the spiraling violence that followed decimated oil production. In the last year, a rapid expansion of oil production has been a rare positive sign in a troubled democracy still facing spasms of violence. Iraqi oil exports have grown from an average 1.9 million barrels a day average in 2009 to about 2.5 million barrels a day in May. That is about the same level that Iran was exporting last year, but Tehran's exports are now down to less than 1.8 million barrels per day now because of American sanctions, U.S. officials estimate. With 143.1 billion barrels of proven oil reserves -- the fourth-largest in OPEC
-- Iraq has plenty of room to grow in both production and exports. Iraq's rapid expansion in coming years could wreak havoc with OPEC's system of production quotas intended to control prices, according to analyst Ciszuk. The organization wavers between individual country quotas and the current system of an overall production limit for all countries, which it decided Thursday to keep at 30 million barrels a day. In recent decades, Iraq's oil hasn't figured in that system because its exports were underperforming. But once it surpasses Iran and tops 5 or 6 million barrels per day in production, OPEC members will demand that Iraq rejoin the quota system, probably within two or three years. With Iraq pumping 3 or 4 million extra barrels a day, other countries would face the choice of either cutting their own quotas to accommodate Iraq or raising the overall production level. Its ambitious expansion goals and contracts with major oil companies depend on pumping more and more oil, so Iraq's own self-interest in coming years is likely to reverse its stance of pushing for production cuts
-- despite its political relationship with Iran. "In the end, you know, it tends to be the money that decides a lot of these things," Ciszuk said.
[Associated
Press;
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