“Buy at the sound of cannons”: Global oil giants compete for the “Iraqi prize”

“Buy at the sound of cannons”: Global oil giants compete for the “Iraqi prize”

2026-10-21

Shafaq News – Special Translation
The Australian website “The Age” reported that giant oil companies are “not afraid” and are heading to Iraq at a time when the United States and Iran are fighting, applying the philosophy of the famous British banker Baron Nathan Rothschild in the 19th century: “Buy on the sound of cannons, and sell on the sound of trumpets.”

According to the Australian website, in a report translated by Shafaq News Agency, Rothschild, who financed the Napoleonic Wars, may not have uttered this investment principle that many attribute to him, but echoes of this philosophy of his are heard today in the Middle East, from the executives of oil companies.

The report quoted Chevron President Mike Wirth as saying, in reference to the reasons for negotiating with Baghdad, that “revenues come after risks, and as you know, we are not afraid of risks.”

The report noted that Iraq is indeed fraught with danger, and even more so given the raging war in the region, but for the first time in decades, Iraq is providing major oil companies with the kind of returns they aspire to.

The report suggested that when the guns fall silent, Baghdad will emerge as the winner in the regional crisis, attracting billions of dollars from companies such as Chevron, BP, ConocoPhillips and even ExxonMobil, while the French oil giant Total Energizer is already a major investor.

According to the report, with the new contracts that Iraq has concluded so far, and those that it is currently negotiating, the country will be able to boost its production capacity to 5.5 million barrels per day by 2030, noting that before the war it was pumping about 4.5 million barrels per day, indicating that Baghdad had always hoped to increase its production to 6 million barrels per day, which would make it second in the Middle East region after Saudi Arabia.

The Australian website noted in its report that while Iraqi Prime Minister Ali al-Zaidi had spoken in recent months about increasing oil production to 8 million barrels per day, and even 10 million barrels per day, beyond 2035, the report indicated that despite the influx of capital, these goals are unrealistic.

However, the report said that boosting production by 20% to 30% would be more sensible and a tremendous achievement, especially in light of the current US-Iranian conflict.

The report said that a key question about Iraq and OPEC was left unanswered: how will this cartel be able to accommodate Baghdad’s desire to pump much larger quantities of oil? The report suggested two possible outcomes: first, that OPEC will turn a blind eye to Iraq’s overproduction, as it has done in the past with other members, including Algeria and the UAE; and second, that Iraq will simply ignore the cartel and eventually withdraw from it.

The report noted that Iraq may face obstacles if the Strait of Hormuz remains a war zone, but it has options to overcome them, pointing out that Baghdad already ships limited quantities of oil using a pipeline that runs north through Turkey to the Mediterranean Sea, where the oil is loaded onto tankers. It added that the end of the Syrian civil war has presented Iraq with another possibility: a shorter pipeline westward, also ending in the Mediterranean Sea.

According to the report, the oil industry has been eager for decades to win the Iraqi prize, and the first opportunity came in 2003 after the US invasion led by George Bush, which toppled Saddam Hussein, who had kept these enormous oil resources largely out of the reach of foreign companies after coming to power in 1979.

He went on to say that the major oil companies never got from Baghdad what they had hoped for and what Bush and his deputy Dick Cheney had promised, adding that instead of the desired contracts known as production-sharing agreements, which take advantage of high oil prices and allow companies to book reserves, they got service contracts, which paid only a small fixed price per barrel and did not allow for the booking of reserves.

The report noted that despite this, many major oil companies made deals, but were forced to leave Iraq after a few years after concluding that the returns did not compensate for the risks.

But now, the report says, Iraq is proposing a new deal involving production sharing rather than service contracts, which would allow it to secure better prices and reserve reserves.

The report quoted Wirth as saying at the Energy Intelligence Forum in London recently that “the financial conditions in Iraq have become more attractive, and the economy looks better now.”

The report noted that three years ago, the French company Total Energizer became the first major oil company to move into Iraq on better contractual terms, through an investment of $27 billion over several years in both oil and natural gas fields.

According to Total CEO Patrick Pouyanné, there are no regrets despite the outbreak of war. The report quoted him as saying, “The Middle East still has the cheapest oil.”

The report concluded that British Petroleum followed Total’s lead last year with another contract and brought ConocoPhillips into the project months ago, but the most significant development was Chevron’s entry through its initial deal with Baghdad over assets formerly owned by the Russian oil giant Lukoil, with the final contract expected to be concluded in 2027.

The report concluded by noting that Iraq is pumping far less than its maximum production capacity due to the effects of the US-Iran war, but the world should expect more oil from Baghdad in the near future.

shafaq.com