GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
Iran-Iraq Oil Links & Impacts of the GCC
Paper Proposal Text :
Since the 2003 American invasion of Iraq, the role of Iran in Iraqi affairs has been crucial. In the region of Basra, southern Iraq, accounting for 70% of Iraq’s oil wealth, Iran enjoys extensive ties with both state and non-state players: Iranian Shi’a militias constitute a considerable force of the Iraq’s Popular Mobilization Force and the Revolutionary Guard Corps play a significant role in defending the country from the Islamic State. That has enabled a full economic engagement with the area: a free trade zone between Iran and Iraq has been created, multiple cooperation agreements have been signed, and illicit practices have been conducted: the ‘Iraqi special blend’ – which allowed Iran to sidestep sanctions, participate in oil smuggling and alleged illegal trafficking of narcotics. This paper will examine the status of Iranian presence in the oil-rich south of Iraq since the July nuclear agreement. First, it will briefly illustrate the Iranian economic engagement with the governorate of Basra during the embargo, focusing on the illegal business that was conducted to overcome the sanctions. Then, it will describe the current status of the Iranian presence in Basra, analyzing the Iraqi-Iranian trade and oil business since the nuclear agreement and the lifting of the sanctions. Finally, it will examine the implications of its engagement with Basra at a regional level, in the context of the GCC growing concerns about the return of Iran on the international arena and in the global oil and gas market. As mentioned, the governorate of Basra accounts for 70% of the Iraqi oil, and international oil companies – such as Shell or BP – have been operating in the area. Thus, when analyzing the Iranian return on the global oil market and its implications on the GCC oil and market share, the Iranian economic engagement with such a region is extremely relevant and deserves full attention.