The Crude Wealth of Iraq
Wealth in the world is shifting toward the owners of crudeoil making every Iraqi a present value millionaire. Over the next two decades, totalworld energy consumption will double with serious energy alternatives decadesaway. Energy prices and the energy share of national income will increase. Monopolyresource profits will go to the owners of oil.
The Arab Gulf has 65% of the world proven oil reserves, andIraq 12%. If oil in the ground is money in the bank, Iraq is wealthy. Iraq canproduce 2 billion barrels per year. At $100 per barrel, that oil would sell for$200 billion. The population of Iraq is 24 million and that oil income translatesto $8000 per person. If Iraq sells a quarter of its potential reserves at anaverage price of $100 for the next 20 years, that would generate 90 billion x$100 = $9 trillion. If the population of Iraq grows to 30 million that would be$300,000 per capita for 20 years, or $15,000 annual income per capita. Productivecapital assets are $60,000 per capita in the US, and $5,000 in the entireworld. If Iraq invests only a quarter of its oil revenue for the next 20 years,it will match current US productive assets per capita.
The total value of Iraq potential oil reserves at anaverage profit of $75 per barrel over next 100 years is 360 billion x $75 = $27trillion or $900,000 per capita, making every Iraqi a millionaire. Thesecalculations do not include natural gas revenue, lately about equal to oilrevenue. Also, most of Iraq has not been explored for gas or oil. In the ArabGulf region, proven oil reserves are 195 trillion barrels. Selling this at anaverage profit of $75 per barrel for the next 100 years will generate $15,000trillion income. If half of that is invested, it would amount to $7,500trillion or a quarter of the present total capital assets in world.
