Iraq and BRICS – The RV Writing is Now on the Wall
There is a popular phrase in the smart investments community: “There are no certainties, there are only probabilities”.
Applying this to the IQD, the probabilities of an RV just moved a lot higher.
Joining the BRICS alliance would offer Iraq economic stability, enhanced trade relations, and a stronger bargaining position in the global economic and foreign currency exchange landscape.
A recent series of strategic and geopolitical moves involving Iraq, particularly the centralization of oil governance, Russia’s influence in Kurdistan, and China’s economic inroads, suggest a realistic scenario where Iraq formally joins the BRICS alliance to establish its economic power and IQD currency strength.
The move towards a unified oil law (more on this in an upcoming article), orchestrated in collaboration with Russia’s interests, signifies a shift away from Western influence in Iraq’s oil sector.
As Iraq pivots toward a more strategic economic approach, it’s common ground with BRICS nations, who advocate for multipolarity and
resist Western dominance, continues to grow.
Here’s why:
Russia and China are strategically securing control over Iraq’s oil resources, particularly the Eridu oil field in Block 10, which is the largest discovery in Iraq in the last 20 years.
Lukoil, a Russian company, aims to take complete control of this oil-rich area by acquiring Inpex’s 40 percent stake in Block 10.
Russia’s influence in Iraq’s oil industry has expanded, notably with its effective takeover of Kurdistan’s oil and gas industry.
Furthermore, China’s extensive economic engagement, including the Belt and Road Initiative and preferential oil agreements, positions Iraq within a sphere of influence that aligns with the BRICS ethos.
Joining the BRICS alliance would offer Iraq economic stability, enhanced trade relations, and a stronger bargaining position in the global economic and foreign currency exchange landscape.
Additionally, considering the BRICS Alliance’s discussions around alternatives to the U.S. dollar as a global reserve currency, Iraq is likely considering a more diversified and resilient currency strategy within the BRICS framework.
Strategic Winners and Losers
Winners: Russia and China emerge as strategic winners, consolidating control over Iraq’s oil resources and expanding their economic influence.
They benefit from favorable agreements, infrastructure projects, and weakened Western influence.
Losers: Western nations and companies face a decline in influence as Russia and China strategically secure key positions in Iraq’s energy sector.
Other regional players not aligned with Russia and China may also lose out on economic opportunities and influence.
The Big Picture Clearly Shows the Writing on the Wall: Iraq Will Join BRICS
The broader strategy involves multiple exploration and development deals between Russian and Chinese firms, granting them a significant geopolitical presence in Iraq.
Both countries are leveraging agreements, such as the Iraq-China Framework Agreement, which provides China with first refusal on oil projects and a 30 percent discount on oil, gas, and petrochemical purchases.
China is also allowed to build factories and infrastructure across Iraq, including railway links as part of its Belt and Road Initiative.
These plans extend to the southeast region of Iraq, connecting to the major oil export hub of Basra.
Russia and China aim to establish control over oil and gas fields and transportation hubs in this region.
Major New Projects Favor BRICS – Not the USA/West
Infrastructure projects, such as the approval of funds for Al-Zubair and the construction of a civilian airport in Dhi Qar, demonstrate China’s increasing involvement in Iraq’s development within the framework of oil-for-reconstruction agreements.
Major New Projects Favor BRICS – Not the USA/West
Infrastructure projects, such as the approval of funds for Al-Zubair and the construction of a civilian airport in Dhi Qar, demonstrate China’s increasing involvement in Iraq’s development within the framework of oil-for-reconstruction agreements.
Overall, this signifies a broader shift in influence away from Western countries in Iraq’s energy sector.
Lukoil’s Acquisition of Inpex’s Stake in Block 10
Significance: Lukoil, a Russian company, aims to take control of Iraq’s Eridu oil field, the largest oil discovery in Iraq in the last 20 years. This move aligns with Russia’s strategy to dominate Iraq’s oil resources, reducing Western influence.
Winners: Russia and China, as they strengthen their control over Iraq’s oil sector.
Losers: Inpex, a major oil company from the U.S. ally Japan, loses its stake in the Block 10 region, marking a decline in Western influence.
Russian Control of Kurdistan’s Oil and Gas Industry
Significance: Russia effectively took over Kurdistan’s oil and gas industry through Rosneft, consolidating influence in a troublesome semi-autonomous region. This maneuver contributes to Russia’s broader plan for dominance in Iraq.
Winners: Russia, as it extends its influence over Kurdistan and weakens ties between the region and the central Iraq government.
Losers: Western interests, as Russian influence in Kurdistan grows.
Iraq-China Framework Agreement
Significance: The agreement gives China first refusal on Iraqi oil, gas, and petrochemical projects, along with a 30 percent discount on purchases. It also allows China to build factories and infrastructure in Iraq, aligning with its Belt and Road Initiative.
Winners: China, securing favorable terms and expanding its economic and infrastructural influence in Iraq.
Losers: Other countries seeking access to Iraq’s energy resources, facing competition and potential exclusion due to China’s preferential treatment.
Infrastructure Projects in Al-Zubair and Dhi Qar
Significance: China’s heavy involvement in infrastructure projects, funded by Iraq, strengthens economic ties and contributes to the oil-for-reconstruction agreement. The projects enhance China’s presence in key regions with significant oil fields.
Winners: China, gaining influence through infrastructure development in strategic areas.
Losers: Other nations and companies competing for similar projects in Iraq, as China secures key infrastructure deals.
Construction of a Civilian Airport in Dhi Qar
Significance: China secures a major contract to build a civilian airport in a region rich in oil fields. This project facilitates economic development and connectivity in an oil-rich area.
Winners: China, expanding its infrastructure projects in areas crucial for oil production.
Losers: Other nations seeking similar contracts and influence in the same region.
Al-Sadr City Development Deal
Significance: Chinese companies are involved in the development of Al-Sadr City, contributing to the oil-for-reconstruction agreement. This deal further cements China’s economic involvement in Iraq.
Winners: China, strengthening its economic ties and presence in key urban areas.
Losers: Competing Western nations and companies aiming for reconstruction and investment projects in Iraq.
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