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From Juan Cole:

The big news out of Iraq over the weekend was the awarding of a handful of new oil development contracts to companies such as Royal Dutch Shell and Russia's Lukoil. These bids follow earlier awards of fields for development to China. The American oil majors failed to conclude any new deals, though Exxon Mobil won a bid for West Qurna 1 in November. The Iraqi authorities have strong motivations to diversify their petroleum customer base given the current hegemonic position of the United States in their country.

And will all this extra oil coming online from Iraq reduce the price of gas?

China's petroleum consumption was up by 14% this November over the previous year, and daily imports have risen now to over 4 million bpd. Not so long ago, China was bringing in just 3 million bpd. In other words, even if Iraq could suddenly increase its production by a million barrels a day, it would simply be meeting the recent increase in Chinese demand. The extra petroleum Iraq might pump in the near to medium term won't keep oil prices low, it will simply help prevent them from skyrocketing.

This is the next phase of Iraqi history:

The petroleum wealth, insofar as it flows into government coffers, will also prove challenging to the survival of Iraqi democracy. Very few countries that generate more than 25% of their GDP from petroleum exports have managed to remain stable and democratic. It is simply the case that petroleum wealth will, over time, make the Iraqi government overwhelmingly powerful vis-a-vis its own citizens. Charges are already flying that Prime Minister Nuri al-Maliki is using his control of petroleum resources to establish tribal militias loyal to his Dawa Party, and to bolster Dawa's performance in elections.

After spending more than $500 billion on the Iraq fiasco, with over 3,000 deaths and 25,000 injuries since 2003 when the war on Iraq began, are Americans even paying attention to any of this? It's truly amazing how quickly Iraq has fallen off the radar screen in this country.

Professor Cole follows this every day at his blog, Informed Comment. Don't miss it.

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