Iraq Oil Revenue May Top Outlook

A new U.S. government report projects Iraq's oil revenue will top a record $70 billion this year, adding fuel to a congressional push to force the Iraqi government to assume more responsibility for rebuilding the country.

"A new U.S. government report projects that Iraq's oil revenues will top $70 billion this year, adding fuel to a growing Congressional push to force Iraq's central government to assume more responsibility for rebuilding the country.")

The report from Special Inspector General for Iraq Reconstruction Stuart Bowen, which will be released Wednesday, highlights the windfall Iraq stands to reap this year because of soaring oil prices. The cost of a barrel of Iraqi oil has increased by 250% since 2003, and Iraq earned more than $18 billion from oil sales in the first quarter of 2008, the report found.

If Iraq is able to maintain its current levels of production and exports for the entire year, its oil revenue will be double what the Iraqi government had anticipated even a few months ago. "Iraq's oil income, forecasted in 2003 to be the primary pool of capital for post-war reconstruction, now has become the chief funding source," the report found.

The report comes as lawmakers from both parties push measures designed to force Baghdad to spend more of its oil money on reconstruction. Sens. Susan Collins (R., Maine), Ben Nelson (D., Neb.) and Evan Bayh (D., Ind.) are drafting legislation requiring future U.S. reconstruction aid to Iraq to come in the form of loans, rather than grants.

"The time has come to end this blank-check policy and require the Iraqis to invest in their own future," the senators wrote in a letter to Defense Secretary Robert Gates.

Rep. Ike Skelton (D., Mo.), who chairs the House Armed Services Committee, said Tuesday he would support efforts to restrict further U.S. aid to Iraq unless Baghdad began spending more of its oil money.

"They could put that money into reconstructing their own country," he told reporters. "There's going to have to be some sort of honest to goodness pressure like redeploying our troops and or cutting back our aid." - wsj

Interesting way to benefit from the oil riches of the country we invaded. I guess this is the punch line to Colin Powell saying a few years ago that Iraq's oil belonged to the Iraqi people. Well, it belongs to them, but they must spend it on what we say. Naw, this war in Iraqi was never about oil. Suuure.