Download now: Oil Price Outlook 2024

Iraq's Oil Crisis

Keith Kohl

Written By Keith Kohl

Posted June 13, 2014

Almost 90 years ago, an oil company struck a deal with the devil in Iraq.

Truth be told, there was only one oil company around at the time. Before changing its name to the Iraq Petroleum Company in 1929, the Turkish Petroleum Company had a complete stranglehold on Iraq’s oil industry.

When the company struck oil in Kirkuk in 1925, the scene was reminiscent of a Texas gusher. To the right, you can see the grainy image of one such well.

chart kirkuk gusher

Of course, wherever there’s oil, you can be sure to find some familiar names. In Iraq, the scent of oil money drew the attention of companies like Standard Oil of New Jersey, Standard Oil Company of New York, Gulf Oil, the Pan-American Petroleum and Transport Company, and Atlantic Richfield Co.

The five major oil companies inked a deal in 1928 in order to develop the country’s oil resources. You might recognize a few of them by their more well known names today: ExxonMobil, Chevron, and BP.

That first oil gusher kick-started Iraq’s oil industry, which now boasts reserves of 115 billion barrels. Assuming they’re not cooking the books (I’ll give them the benefit of the doubt this time), some reports suggest the country actually has an extra 50-100 billion barrels of oil reserves that will eventually be added to that…

It’s too bad they may never get a chance to sell those barrels.

Saudis Tremble While You Profit

Although my colleague Christian DeHaemer and I have had a few rows over the energy boom that’s raging across North America, we’ve been seeing eye to eye on where it’s headed.

After he mentioned yesterday that Iraq’s geopolitical violence will have a severe affect on the country’s production, I couldn’t help but ask if there was a light at the end of the tunnel for OPEC’s second-largest producer.

“Light?” he repeated skeptically. Then he continued, “When these guys hit Basrah, you’ll see the first catalyst for $200 oil that we’ve seen in a decade. Think about it. We’re not talking about Libya and possibly missing out on a million barrels or so of light oil here.”

And you know what? Chris was absolutely right.

There really wasn’t much danger of oil prices spiking from shut-in Libyan production — the Saudis were able to easily pick up that slack. (For now, we’ll forget that Saudi Arabia’s spare production capacity is of poor quality compared to light, sweet oil from Libya.)

Aside from the Saudis, Iraq is perhaps the only other OPEC member capable of significantly increasing oil production. In fact, it was only a few months ago that Iraq’s oil production rose to its highest level in the last three decades.

Estimates have run wild over the last few years, too. In 2012, the IEA was confident that Iraq would double its production to top six million barrels per day in 2020. By 2035, they reported that output would be 8.3 million barrels per day.

Thing is, most of this production will come directly from the massive, super-giant oil fields in the southern part around Basrah.

Just imagine what the consequences would be if the Islamic State of Iraq and the Levant (ISIL) takes control of Iraq’s southernmost province. Not only does Basrah contain the country’s largest oil reserves, but it’s also Iraq’s only access to the Persian Gulf, where most of its oil is exported.

The situation is quickly deteriorating, and Saudi oil princes are trembling in fright. Even the most optimistic wishful thinkers out there don’t believe Saudi Arabia can replace four million barrels of oil at the drop of a hat.

I’m sorry, but that’s not going to happen.

Fortunately, there’s a better way to take advantage of high oil prices.

In fact, the smart money is already capitalizing on North America’s oil boom now — before the rest of the herd catches on to the situation in the Middle East.

The real question is how to beat them at their own game.

You see, it isn’t often that we come across a guaranteed winner nowadays. And no matter how much we want to rewind the clock to 2009, when you could blindly throw a dart at a wall of oil companies and come up big, individual investors can be at a huge disadvantage.

Today, you need a proven strategy before you battle the market.

Yet there are few tried and true ways of pinpointing those undervalued opportunities that can deliver the kind of oil profits you would expect in this shale revolution. My readers and I, for example, have narrowed it down to one simple formula, and it’s delivered winner after winner for nearly half a decade.

I urge you to take a few moments and check out these details for yourself by simply clicking here.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basicCheck us out on YouTube!

A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.

Angel Pub Investor Club Discord - Chat Now

Keith Kohl Premium



Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.