By Dr. Pshtiwan Faraj While governance requires modern legal and scientific institutions, there is still no oil and gas law in Iraq. This is not just a technical detail, but the cornerstone of the economic and political governance of the Iraqi state. Enacting an energy management law means resolving long-standing disputes between the central government and the regions over powers and revenues, establishing clear rules for managing national wealth, and avoiding temporary political agreements. The law also provides a stable framework for investment in the energy sector, enhances Iraq’s capacity for long-term economic planning, and reduces the legal and political conflicts that have plagued the sector for years. Why, after two decades of writing the constitution, has the state not passed a law to manage energy resources and production? What have been the economic consequences of the absence of such a law in Iraq? Is the US administration close to submitting such a bill to Iraq?
1. shaping key energy issues in Iraq
The existence of a law for the management and production of “energy” in Iraq represents a radical change in the management of oil, which has often created deep economic, environmental and political crises, making Iraq as a state with clear institutions and rules.
There are various economic and oil obstacles in Iraq, but four of them are very painful.
First, Iraq has a problem of not diversifying its revenue sources. A country cannot rely on one sector for 90% of its revenue sources. Moreover, the Iraqi governance team could look more closely at energy security; Energy is not just oil and gas. Until recently, the Iraqi government has produced and sold crude oil. From 2004 to 2025, more than $4 billion has been spent annually to import oil products. gasoline, jet fuel and some other components; This is a senseless waste of public capital and finances.
Second, according to the IMF, Iraq is either second, third or fourth in environmental pollution and gas waste, while the gas separated from the oil is a national asset. You cannot burn your own gas and pollute the environment, but import gas from Iran or Turkmenistan to generate electricity.
Third, Iraq has become dependent on regional geopolitical problems; Here he has lost his sovereignty and has not recognized his higher interests, or has known them and has not been able to make decisions. For example, the non-diversification of oil export channels is one such disaster. Iraq has two lines to the Mediterranean (Mediterranean Sea), the first to the port of Ceyhan, the second to Banias; If Iraq had had a strong pipeline infrastructure and several ways to export its oil except through the Strait of Hormuz during the three months of the Iran-Israel-US war, it would not have lost more than $18 billion. Iraq could normalize relations with Saudi Arabia and take oil to Yanbu, or to the port of Aqaba via Jordan.
"Diversifying export channels will lead to economic growth, opening up markets and access to various other capital, as well as opening Iraq to global and regional economic markets and promoting diplomacy.
Fourth, billions of Iraqi dollars are wasted annually in the transportation of crude oil and refined products. The Iraqi Oil Tanker Company (IOTC), established in 1972, will have only six oil tankers with a total capacity of 117,000 tons in 2026, four of which are over 15 years old and must be repaired every five years. In 2026, when Iraq will be completely disrupted by the closure of the Strait of Hormuz, Iraqi state oil companies will have no specialized tankers to transport crude oil, although in 1983 they had 25 tankers with a capacity of 1.485 million tons He was carrying. While Kuwait has 32 tankers transporting crude oil, gas and oil products with a capacity of 4.64 million tons, but Iraq has nothing!
2. Darkening the problem accelerates the embodiment of the solution
The above challenges reflect the lack of strict legal institutions and governance in the energy sector in general. Indeed, the lack of such a comprehensive law creates legal and administrative uncertainty, delays attracting foreign investment, and continues to waste associated gas in oil extraction processes. For fifteen years we have been looking at the official website of the Iraqi Ministry of Oil and following the government's discussions on this issue; They say the solution is underway,,, we have started,,, if we want to repair the oil pipeline in a week ..! The delay in passing the federal oil and gas law in Iraq is another promise that has been going back to years of complex political power struggles.
In my opinion, it is not a scientifically appropriate name to say "Oil and Gas Law", even the name of the ministry (Ministry of Oil) is a big mistake. While the developed world is making successive innovations the basis of environmental cleanliness, working on energy efficiency, diversifying their energy sources and economies, strengthening infrastructure, improving their human and technological capabilities.
In fact, four main reasons can be identified behind the absence of a law entitled “Energy Resources Management and Production Law”:
Conflict over field management: The federal government insists that oil resource management is the exclusive choice of the oil ministry, while the KRG and oil-producing provinces demand broader powers in contracting and exploration.
Crisis of constitutional powers: Interpretations of articles of the Iraqi constitution on natural resource revenues are contradictory; Should they be administered solely by the central government, or jointly with regions and provinces that are not organized in a region? Circling within the empty circle of this constitutional circle will not solve the problem, but the only solution is for Iraq to pass an appropriate law to manage "energy resources. Otherwise, these problems will remain unresolved forever. Articles 110, 111 and 112 of the Constitution form the basis of legal dispute, as each side interprets it to serve its own point of view. Article 115 of the Iraqi Constitution defines the powers of the Kurdistan Region and oil-producing provinces that have not yet been organized into a region, giving priority to regional law in the event of conflict or conflict with federal laws on shared powers.
Contracts with foreign companies: There are differing views on the legal framework of oil contracts signed with foreign companies, the mechanism for payment of their dues and the parties authorized to approve them.
Distribution of oil revenues: Failure to agree on clear criteria to ensure fair and equitable distribution of oil and gas wealth to all Iraqi provinces without discrimination.
In addition to all the above, we identify three other factors that make the problem so dark that if the Iraqi government and parliament cannot pass a law to manage energy resources, the US administration may prepare a draft for this law:
2 .1. Digital technology and artificial intelligence are reshaping energy management and production
Digital technologies and artificial intelligence are poised to reshape energy production and management by enabling smarter power grids, optimizing renewable energy integration, improving energy efficiency, predicting equipment failures before they happen, and automating complex industrial processes. Artificial intelligence (AI) can analyze large amounts of real-time data from power plants, transmission networks and users to reduce waste, reduce costs and increase system reliability. Similarly, digital tools such as sensors, digital twins and advanced analytics can make energy systems more flexible and resilient.
Artificial intelligence is becoming the central nervous system for the global energy industry. So, as global demand for clean, secure and affordable energy grows, countries should take these developments seriously by investing in digital infrastructure, more artificial intelligence research, workforce skills, cybersecurity and supporting regulations, ensuring technological innovation strengthens energy security It enhances long-term economic competitiveness. Digital technology and artificial intelligence have changed the face of the world, and Iraq must rebuild its institutions. Institutions can be built with an appropriate and modern law, which Iraq does not have in the field of energy!
2.2. Increased world demand for natural gas and oil
As reported in my previous analysis, the Israeli-US war with Iran completely removed that mask; Despite the many technological advances and innovations in the world, humanity's needs for oil and gas are still increasing, and sometimes coal mines are shining:
In 1980, the average daily consumption of oil in the world was 63 million barrels, in 2025, the average daily consumption of oil will reach 105 million barrels. OPEC and many other institutions expect this demand to reach 114 million barrels per day by The increase in demand for fossil fuels has been much greater. In 1980, the world consumed 53 trillion cubic feet of natural gas. In 2010, this level of demand rose to 113 trillion cubic feet. In 2025, the world will use 150 trillion cubic feet of gas!
This is a paradox between renewable and traditional energies that the world is clearly experiencing; As rapid advances in renewable energies (especially solar, wind, green hydrogen and car batteries) occur and global attention spreads, the same amount and direction the world's need for traditional energies such as natural gas and oil will increase! Powers such as the US administration, China and Russia have understood and experienced this well, so the competition in the Middle East is directly related to control of oil and gas.
2. 3. The threat of the collapse of the Iraqi state
The federal government in Baghdad is afraid of passing a law that gives more rights to oil and gas-producing provinces (such as Basra, Anbar and Mosul), which will then demand the creation of a region within Iraq's federalism. On the other hand, if the law is not passed, it will increase foreign interference in Iraq, especially Turkey's hegemony and interference in Kirkuk and Mosul. Since May 2023, Saudi Aramco and US companies have been sitting on the huge reserves of natural gas discovered in the Okaaz field in Anbar: the approved amount is 5.6 trillion cubic feet of gas.
Several other fields are under development. it's strange; A country claims to have 145 billion barrels of oil and 137 trillion cubic feet of gas reserves, but still does not have a law to manage this natural resource!?
2. 4. Why doesn't Iraq have electricity?!
The Kurdistan Region is close to providing 24-hour electricity to its four provinces. But in the other 14 provinces of Iraq, sometimes they have no electricity in the summer heat!
From 2005 to 2025, more than $100 billion has been spent on electricity generation and transmission projects, and the crisis continues to plague Iraqis! Even more tragic is the waste of Iraqi wealth; According to the Washington Institute for Middle East Policy, the burning and waste of gas during oil production means that Iraq wastes $2.5 billion annually, burning ten times as much gas as it imports. While 85% of the country’s power plants rely on natural gas.
Look at this data: In 2023, Iraq needed 33,000 MW of electricity, now in 2026, Iraq's need has increased dramatically to 62,000 MW! The Ministry of Electricity says; About 40% to 50% of the electricity produced domestically is wasted (we thought every gas was wasted!), and this waste occurs during the transmission, due to the old transmission lines. Thus, by mid-2026, Iraq will have a 60% electricity deficit!
3. If Iraq does not pass the law; The United States is rewriting a draft!?
In Orientalism, Edward Said noted that many Western scholars and policymakers portray the “East” (including the Middle East) as irrational, passive, and incapable of modern political development. According to Said, such portrayals helped justify domination and intervention.
In the late 20th and early 21st centuries, some American neoconservative thinkers such as Paul Wolfowitz, Robert Kagan, and Richard Perle argued that authoritarian regimes in the Middle East needed to be changed and that democracy could be promoted through external pressure or in some cases military intervention. These ideas influenced the debate surrounding the war in Iraq, although even among supporters there was disagreement over whether force could successfully create democracy.
If you read the history of the Iraqi state, you will see two things; first; coup and chaos, second; external interference. History tells us; Not only has politics affected Iraq, but the laws in Iraq have been written under external influence. This is more dangerous because political influence is temporary, but the laws last for a long time; There is a law that was passed in 1926 for Iraq, and it is still being implemented. In the 1920s, the British introduced laws for Iraq. In 1963, Arif changed the constitution three times to bring it into line with Egyptian law because he was impressed by Jamal Abdul Nasser. In 2003, the Bremer Act was passed by Iraq's civilian governor, Paul Bremer. In 2005, American experts played a significant role in drafting the Iraqi constitution so that one community would no longer oppress another.
After 2005, Iranian laws were passed in Iraq, such as the Jaafari law, the personal status amendment law, the establishment and increase of holidays. The killing of Hassan Nasrallah was put on the agenda of parliament, but the attack on Iraqi oil and gas fields was not put on the agenda!
Now, in 2026, why should we be surprised that Trump's special envoy for Iraq and Syria, Tom Barrack, will rewrite a law on Iraqi oil and gas, or submit a draft to the Iraqi government? The appointment of a figure like Tom Barak itself means economic entrenchment. The June 16, 2026 joint statement between the Iraqi prime minister and the US president's special envoy emphasized providing security assurances to US companies such as HKN, Western Zagros, and Hunt, marking a complete strategic shift in energy between Washington, Baghdad and Erbil. More effectively, there is a complete geopolitical shift in energy in Iraq: “Iraq will become a new Silk Road to the Mediterranean.” The same US companies operating in the Kurdistan Region have also begun operating in northeastern Syria (Western Kurdistan).
finish:
In the international relations literature, energy is "the common ground between the nations of the world. After the Iranian war, Iraq became a major arena for US maneuvers in the region. Energy needs the legal and scientific establishment to stand behind it. Therefore, Iraq desperately needs a proper law to manage energy resources, including oil and natural gas, and this issue must be moved by the Oil and Gas Committee of the Iraqi Parliament, a move that takes into account all the inefficiencies and irregularities mentioned in this article. Moreover, it is not only the power transmission lines that are rusting and wasting resources, but Iraqi institutions throughout need to be renovated in line with modern science. If this does not happen, we will certainly see clear US intervention to pass legislation to manage energy resources.
#Iraq #Energy #OilAndGas #KRG #Oil #EnergySecurity #Geopolitics #USIraq #MiddleEast #Investment #EnergyPolicy #NaturalResources #Governance #Constitution #KurdishPolicyAnalysis
Comments
Post a Comment