Does the U.S. Deserve a Chunk of Iraq’s Oil Revenue?
Iraq’s income from crude oil revenue skyrocketed by 49% last year, to nearly $61 billion, according to a senior Iraqi official. Exports averaged 1.85 million barrels a day in 2008, some 13.5% more than in 2007.
The question is, does the U.S. stand to gain any reimbursements for the amount of money they spend in the war?
According to Pentagon figures, costs to the United States in fiscal 2008 run to the tune of $10.9 billion per month for the war in Iraq.
Congressman Ron Klein, D-Fla., introduced legislation last year that would require the Iraqi’s to pay for some of the U.S. operations going on in their country.
“The Iraqi government is sitting on the second-largest oil reserve in the world and expecting a multi-billion dollar budget windfall this year, yet the United States continues to finance their reconstruction,” said Mr. Klein. “This defies common sense. American taxpayers – myself included – are not willing to foot the bill any longer.”
The bill would require that all American funds for Iraq reconstruction and security forces training, as well as the cost of fuel for U.S. operations, to be repaid by Iraq as a loan.
Whether you support the war or not, he said, “it is time for real fiscal responsibility, and that means ending the blank checks to Iraq.”
The U.S. needs to “put the burden on the Iraqi people to say, ‘no more free lunches from the American public,’” Klein said. “It’s not some benefactor from the outside who just keeps writing more and more checks every month.”
Iraq sits atop the world’s third-largest reserves of crude oil.
As the security situation in the country has settled down, and attacks against pipelines have declined, Iraq has been ramping up its oil exports to European markets.
According to data on the released by the U.S. Energy Department, Iraq can export oil to Turkey through a 1.1 million barrel per day capacity pipeline and through a 480,000 barrel per day installation.
The country’s goal is to export 2 million barrels per day, a target they reached in May, but have since struggled to sustain that amount.
“Our target is 2 million (barrels per day) in January. If the weather is good and the tankers arrive on time, then we will reach two million barrels per day,” Falah Alamri, head of Iraq’s State Oil Market Organization, told Reuters.
Iraq depends on oil revenues to fund 95% of it’s yearly budget, but some Americans like Congressman Klein believe that if the Iraqi’s want the U.S. to continue with the stabilization effort they should help fund it with their own money.
Defense Secretary Robert Gates says that the Pentagon needs at least $69.7 billion more to cover war costs in Iraq through the end of this fiscal year.
With the longest U.S. economic recession in 15 years currently entering its second year, it may be difficult for the government to come up with the much needed financing for the troops on the ground. The recession is expected to continue well into the current year.