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An Iraqi worker adjusts a control valves at the Daura oil refinery in Baghdad, Iraq. - 

If Iraq gets its act together, it could be the world's second largest exporter of oil, by 2020. That's according to a new forecast from the International Energy Agency. The world needs Iraq's oil to keep up with global demand, says Blake Clayton at the Council on Foreign Relations. Yet the companies doing the drilling might be surprising to anyone who held a "No War for Oil" sign during the war in Iraq.

Most of Iraq's oil contracts have been awarded, Clayton says, and the winners are mostly state-owned oil companies from China, Africa, other Middle Eastern states, and Russia. The assumption that American, or even Western, interests would control Iraq's oil has not come to pass. State-owned interests have had more success, he says, because they've offered to do more than just pump oil.

"Maybe it's to help build roads, to help build schools, to help with some other humanitarian projects."

Clayton calls that type of infrastructure the key to unlocking Iraq's huge potential for oil. Because it's not just getting the crude out of the ground. It's also delivering it to market, and creating a stable society that can keep the industry going. Bhushan Bahree at Cambridge Energy says Iraq's aiming for 8 million barrels a day, by the next decade.

"It'll fall short," he says, "but even falling well short, it's going to be quite an expansion."

Bahree calls it the biggest expansion in the oil market since the fall of communism opened Russia's oil to the world.

 

Follow Eve Troeh at @evetroeh