If the Baghdad government can keep Sunni militants away from its oil fields, production in Iraq may actually increase—though global prices are still seen staying higher.
Fear that Iraqi oil production could be disrupted by an insurgence by the militants has driven Brent futures up 5 percent in the past 10 days to about $115 per barrel. Iraq produces about 3.3 million barrels a day, and is OPEC’s second largest—and fastest growing—producer.
Citigroup analysts Thursday issued a new report saying the outlook for Iraqi oil is for more production, even with the clashes between ISIS and the Shiite-controlled Baghdad government. ISIS, or the Islamic State of Iraq and al-Sham, has seized a number of Iraqi cities, and was battling for control of the country’s biggest refinery in the town of Baiji.