China has reaped the most benefit from Iraq's post-Saddam oil boom, the New York Times reported Sunday.
Almost half of Iraq's oil is now sold to China-Beijing is quickly becoming the Middle East's biggest customer, and this could be a good thing for United States corporations.
When the U.S. invaded Iraq in 2003, their country's oil industry had nearly come to a halt, closed off from free international markets and by government sanctions. Chinese oil companies saw this opening, and quickly responded-they put upwards of $2 billion a year and hundreds of natural gas workers into Iraq, saying yes to less profit in order to gain contracts.
Meanwhile, companies like Exxon Mobil, BP and Royal Dutch Shell didn't partake in bidding wars for Iraq's oil because the terms of agreement were difficult to work with, CNN reported. China, without complaint, took the caveats of contract and ran with them, since they needed the energy to fuel their economy rather than gain excess cash for the oil companies and their owners. Simply put: China doesn't have as many vested interests as the U.S. does that limits their abilities to do business. They just want to buy up some fuel.
"We don't have any problems with them," Abdul Mahdi al-Meedi, an Iraqi Oil Ministry official told the New York Times of his Chinese clients. "They are very cooperative. There's a big difference, the Chinese companies are state companies, while Exxon or BP or Shell are different."
Not only do the Chinese need natural gas, they also want to make moves for expansion. In 2012, the China National Petroleum Corporation put a bid in for a 60 percent share in the West Qurna I oil field, where Exxon Mobil may have to sever its ties, as the company already has financial interests in Iraqi Kurdistan.
The Chinese benefitting from America's invasion of Iraq and subsequent oil boom is not necessarily a bad thing. Higher oil production, usually performed by Chinese workers, has kept fuel prices at a steady pace. Also, China's economic contribution to Iraq could provide necessary funds to a country riddled by sectarian conflict, the New York Times wagers.
David Goldwyn, the State Department coordinator for international energy affairs during President Barack Obama's first term, said this economic development is a 'big plus.'
"Geopolitically it develops close links between China and Iraq...Now that they are there, they have a great stake in assuring the continuity of the regime that facilitates their investment."