ABSTRACT
Oil is another critical dimension of any strategy towards Iraq. Iraq has long been a major oil exporting power, and had produced about 22 billion barrels of oil at the time the Gulf War began. Iraq's oil export revenues have allowed it to be a major trading partner, although they have varied sharply according to world oil prices and the impact of Iraq's wars. Although Iraqi oil production peaked at slightly under 3.5 MMBD in 1979, Iraq produced only about 600,000 barrels per day before it accepted UN Security Council Resolution 986. The acceptance of Resolution 986 adds about 700,000 barrels a day worth of exports to this total at mid-1996 oil prices but scarcely brings Iraqi production back to pre-war levels or meets the production goals set for Iraqi in most Western energy models. This makes the resumption of Iraqi oil production an important factor in determining world oil prices and in setting OPEC quotas.
