Iraq will earn $5 trillion from oil exports through to 2035, according to the Central Scenario in a new study from OECD energy watchdog, the International Energy Agency (IEA). This revenue bonanza presents Iraq with a ‘transformative opportunity’ to ‘revitalize its economy. But formidable challenges to achieving this era of prosperity remain, warns the IEA.
The country’s economic future lies completely in the hands of its oil sector, the Iraq Energy Outlook, a special report of the IEA’s annual World Energy Outlook, shows. Iraq’s economy relies on its oil sector, even more than its Gulf OPEC peers. “In 2011, oil revenue accounted for around 95% of government income and was equivalent to more than 70% of Iraq’s GDP, the report said (See chart below). As such, Baghdad is vulnerable to factors that are outside its control such as oil price trajectory and the evolution of global oil demand. (CONTINUED - 1040 WORDS)