For the mass media chorus, postwar Iraq has come to resemble an emblem of American failure. Spurts of violence seem to be embedded into the fabric of everyday life, plaguing the country with disturbing regularity. Meanwhile, sectarian strife has continued to worsen.\u00a0Inflamed by the civil war in neighboring Syria, unresolved sectarian tensions\u00a0have sent violence in Iraq to its highest since the U.S. troop withdrawal nearly two years ago. To make matters worse, there is a prevailing sentiment \u2013 particularly in the West \u2013 that China has become the \u201ctrue victor\u201d in the Iraq War, benefiting from lucrative oil deals despite having taken no part in the fighting.\u00a0 But be it fear or envy, this grievance is largely unfounded.<\/p>\n
Despite these challenges, Iraq has established itself as a top oil producer. Today, China buys almost half of Iraq\u2019s oil at nearly 1.5 million barrels a day.\u00a0 But this is not enough to quell China\u2019s insatiable energy demands. China National Petroleum Corporation (CNPC), China\u2019s state-owned oil company, is rapidly expanding the country\u2019s share in the Iraqi oil market, pouring over US $2 billion a year and hundreds of workers into Iraq. Since late 2012, CNPC has been seeking to divest Exxon Mobil of its sixty-percent stake in the West Qurna I oil field, one of Iraq\u2019s largest and most lucrative. China is also making aggressive moves to secure its holdings in light of flaring conflict between the Iraqi government and the semi autonomous Kurdish region, which has entered into separate agreements of dubious legality with other foreign oil companies at more generous terms.\u00a0 Quickly capitalizing on the lifting of international sanctions and renewed access to vast oil reserves, China has become the biggest beneficiary of Iraq\u2019s post-Saddam oil boom.<\/p>\n
Symbolism aside, however, Chinese business success in postwar Iraq is not necessarily at odds with U.S. strategic interests. Success in Iraq reduces China\u2019s traditional energy reliance on Iran. As sanctions and potential for instability make Iran an increasingly unattractive source for oil, Beijing\u2019s success in tapping Iraq\u2019s oil reserves makes China more likely to condone \u2013 and to enforce \u2013 international sanctions against Iran for its nuclear program. At the same time, through its willingness to invest in the high-risk Iraqi market and to purchase large quantities of Iraq\u2019s oil, China helps maintain a stable global oil supply, which keeps petroleum prices in check. In fact, without China\u2019s active involvement in Iraq, the West would not have been able to enact sanctions on Iran\u2019s oil exports without risking the prospect of severe global disruptions in oil supply. Further, while the present situation in Iraq may not be ideal, allowing the country\u2019s oil infrastructure to decay and atrophy without Chinese investment would be crippling for an already fledgling, heavily oil-dependent economy in a volatile region. The resulting economic chaos and social instability would only further erode U.S. interests in that part of the world and beyond.<\/p>\n
But above all, success in Iraq reduces China\u2019s demand for oil in more amenable markets, including Venezuela, Russia, and Angola. This benefits the U.S. and its allies, enabling them to pay lower prices for oil and become more strategically entrenched in these countries in the relative absence of Chinese competition. Indeed, China has out competed others in Iraq largely due to Baghdad\u2019s tight restrictions on drilling rights. These restrictions reduce profit margins and lessen Iraq\u2019s attractiveness to U.S. and other Western firms. China, on the other hand, is more concerned about securing energy supply to fuel its rapid development than with corporate profit. As such, it has shown a willingness to play by Baghdad\u2019s rules and to accept lower profits to win contracts \u2013 primarily because China\u2019s state-owned firms do not have to answer to any private shareholders. In its willingness to accept service contracts at a very low per-barrel fee without the promise of rights to future oil reserves, CNPC has carved out a near-surmountable competitive advantage over U.S. and other Western oil companies in Iraq.<\/p>\n
Ultimately, the \u201ctrue victor\u201d stereotype proves to be nothing more than a politically expedient misnomer. Global energy supply is not a zero-sum game. Although China opposed the U.S.-led war, it has now largely assumed the risk in helping to rebuild war-torn Iraq through its heavy oil investments. China \u2013 not the U.S. \u2013 is now the main stakeholder in Iraq\u2019s future.<\/p>\n","protected":false},"excerpt":{"rendered":"