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I RAQ

ratifies treaties, and approves the nomination of certain high-rank- ing government officials. T HE E CONOMY OF I RAQ The production of oil is the most important part of Iraq’s economy. Iraq has an estimated 140 billion barrels of proven oil reserves, giv- ing it the fifth-largest reserves of any country in the world. The oil flows from 70 oil fields throughout the country, from Kirkuk in the northeast to Basra in the south. Iraq has nine oil refineries. The two largest are in central Iraq— one at Bayji, which is north of Baghdad, and another, called Dawrah, in Baghdad. Iraq fully nationalized the oil industry in 1975, and by 1979 it was producing 3.4 million barrels per day (bpd). Production dropped off during the Iran-Iraq War (1980–88), but by 1989 Iraq had rebuilt its extraction and refining capability and was nearly back to the 1979 production level. After Iraq’s invasion of Kuwait and the Gulf War, oil production fell to less than 600,000 bpd, due in large part to the United Nations sanctions against the country. As Iraq was permitted to export greater amounts of oil through the U.N.’s oil-for-food pro- gram, production gradually increased, officially reaching about 2

million bpd during 2001. The 2003 invasion by the U.S.-led coalition disrupted the oil industry again, but by 2009 Iraq’s petroleum output was back around 2 million bpd. After years of neglect, the infrastructure of Iraq’s oil industry is old and prone to breakdowns. The World Bank

Did You Know? Some oil industry experts believe that a huge amount of oil—possibly as much as another 220 billion barrels—may still lie hidden beneath Iraq’s sands. However, the unrest in the country over the past three decades has made new exploration nearly impossible.