One of the biggest headlines in the energy world this year has been the revival of Iraqi oil output. In February, Iraq’s production surged to an average of 3.6 million barrels a day – the highest level since 1979, the year Saddam Hussein took power. Since Iraq has the world’s fifth largest proven oil reserves, it has the potential to expand output much further.
But while geology has bestowed gifts on Iraq, political strife has repeatedly taken them away.
The swift collapse of the Iraqi army in Mosul and other northern towns and the advance of extremist militants toward Baghdad has shaken the country’s stability just as Iraq, now the second largest producer in the Organization of Petroleum Exporting Countries, was starting to bring stability to oil markets.
Oil prices were virtually unchanged on Wednesday, but on Thursday they climbed. The price of Brent crude oil, the international benchmark grade, for delivery in July rose to $112.61 a barrel, up 2.4 percent, on the London-based commodity exchange.
Oil prices are already at their highest level this year, though they were slightly higher at a couple of points last year, partly in response to supply disruptions in Libya. This is the fourth consecutive year in which crude oil prices have bounced along all-time highs. (In 2011 and 2012, Brent hit peaks of about $125.)
By Steven Mufson
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