The Russian invasion of Ukraine changed many equations, including economic and oil prices, which reached record numbers that they had not reached for several years after they approached the barrier of $140 per barrel, turning attention towards Iraq and the possibility that Western sanctions imposed on Moscow would affect Russian companies working in the field Iraqi oil and energy companies, especially since many of these companies have long-term contracts with Baghdad.

Russia produces more than 10 million barrels of oil per day, making it one of the largest oil producers in the world. It also produces 16% of the world's natural gas.

Europe imports from Russia about 25% of its need of oil and 40% of its need of natural gas.

A few days ago, the Iraqi Oil Marketing Company (SOMO) announced that it had achieved the highest export rate in two years, last February at a rate of 3.314 million barrels per day, an increase of 112,000 barrels per day over the previous month, and the highest financial revenue since 2014. At $8.54 billion a month.

The Caliph ruled out imposing sanctions on Russian companies in Iraq (Al-Jazeera Net)

Russian investments in Iraqi oil

The total Russian investments in the energy sector in Iraq amounted to 13 billion dollars, according to a previous statement by the Russian ambassador in Baghdad, Maxim Maksimov, stressing that Russian oil companies, such as Zarubezhneft, Stroytranskaz, Tatneft, Souzene Gas and Ariel Oil Gas Service, are taking active steps towards resuming their work and entering the oil and gas market. Iraqi.

Russia has many oil companies operating in Iraq, including "Gazprom", and has projects in the Kurdistan region of Iraq and in the Badra field in Wasit Governorate.

The reserves of the Badra field are equivalent to 3 billion barrels of oil, and the company, according to the oil expert, Dr. Bilal Al-Khalifa, owns a 40% stake in the Badra oil field, which it won with 3 international oil companies to develop the field within the second licensing round, and 30% of the Badra oil field. The Korean "KOGAS" company, the Turkish company "TBO" (TBO) accounted for 10%.

However, the sanctions against Gazprom have been imposed since former US President Donald Trump, because it is the official sponsor of the Nord Stream 2 gas pipeline, which has stopped working due to US sanctions and has a length of 1,230 km, passing through the Baltic Sea.

Despite this, the company and since 2019 - the year in which sanctions were imposed on the company - has been operating in Iraq without hindrances.

Tawke field is the largest in the Kurdistan region (European)

As for the Russian "Lukoil" company, it is the main operator of the West Qurna 2 field, and it was referred to the company within the oil licensing rounds in 2009. The oil field is located in Basra Governorate (southern Iraq), and its recoverable reserves are estimated at 14 billion barrels. Contract signed in 2010 to 25 years.

Lukoil owns 75% of the West Qurna 2 project, and the state-owned North Oil Company of Iraq 25%, as the Caliph asserts.

Turning to the Russian company "Rosneft", it has contracts in the Kurdistan region, and it has large stakes in oil pipelines, and it does not have contracts in the rest of the regions of Iraq, and it is also one of the companies that was subject to US sanctions in 2020, as the sanctions targeted The company's chairman, Didio Casemiro, accused the company and its president of helping the "illegitimate Venezuelan regime" and its president, Nicolas Maduro, by "mediating the sale and transportation of Venezuelan crude" and dealing with the Venezuelan national oil company PDVSA.

Impact on Iraq

The US sanctions hit two of the three companies operating in Iraq, but this did not affect the work or the oil sector. The Russian company has been replaced, as happened in Majnoon field when Shell withdrew. The second approach is less likely, and is represented in choosing another company in its place.

And about the repercussions of US sanctions on Russian companies and oil prices, the oil expert says to Al Jazeera Net that Iraq will not be harmed by the imposition of US sanctions on Russian companies in terms of working inside the country, but these sanctions may contribute to raising the price of a barrel of oil, and thus the Iraqi oil sector will benefit, as Oil revenues constitute 90% of the state's public revenues.

Shaker criticized the absence of sound economic policies in Iraq to invest the financial abundance achieved as a result of high oil prices (Al-Jazeera Net)

Ukraine crisis continues

If the Western sanctions include Russian companies operating in Iraq, the economic researcher Evan Shaker warns of their repercussions on Iraq, attributing the reason to the large volume of Russian investments in Iraqi oil, and calling on Baghdad to prepare for this, because the US sanctions will be binding, and he acknowledges the difficulty of finding alternatives for the government.

And about the pros and cons of the continuation of the Russian-Ukrainian war on the Iraqi economy, Shaker indicates to Al Jazeera Net that this will raise oil prices to record levels, but he believes that the excessive rise in a barrel of more than $130 is not in the interest of Iraq, because most countries of the world suffer from inflation due to the repercussions of Corona pandemic, and this crisis will exacerbate it and lead to a slowdown in the growth of the global economy.

And because the Iraqi economy is rentier and dependent on the export of crude oil, and it imports most of its needs, as it is a consumer country, the repercussions of the continuation of the war will be negative on Iraq, and it will suffer as a consequence from high inflation, according to Shaker.

Shaker criticized the absence of sound economic policies in Iraq to invest the financial abundance achieved due to the rise in international oil prices.

Jawdat is likely that the Kurdistan government will not abide by the sanctions imposed on Russian companies operating in the region (Al-Jazeera Net)

Does Kurdistan abide by the sanctions?

Moving to the Kurdistan region, in which the Russian company Rosneft owns 40% of the oil pipelines, and the possibility that his government will abide by Western sanctions on Russian companies, Sherko Jawdat, a member of the Energy and Natural Resources Committee in the regional parliament, ruled out this because of the nature of the contracts signed with Rosneft.

However, Jawdat does not rule out political deals that might solve the problem if it occurs, but at the same time he criticizes the regional government for not taking its "duty" towards the Russian-Ukrainian crisis.

And about the extent to which the Kurdistan region has been negatively affected by Western sanctions on Russia, specifically oil companies, if they are included, Jawdat sees - in his speech to Al Jazeera Net - that the type of sanctions will determine their effects on the region and its oil.