The July 14/21 New Yorker carries “Beneath the Sand”, an article by John Cassidy on Iraqi oil. According to the article, despite massive reserves production is very low due to a lack of investment in the 1980s and 1990s and recent looting (Iraqis have been stealing massive oil processing equipment and taking it over to Iran by boat then selling it for $50/ton as scrap steel).
Under the most optimistic assumptions it seems that Iraqi oil production will rise to 6 million barrels per day by 2010, which will be worth $55 billion/year at $25/barrel. The population of Iraq meanwhile is expected to balloon to 30 million people by 2010. So on a per-Iraqi basis the oil revenue would only be about $1500 per year. If half of that money goes for the cost of production, as a return to investors who rebuilt the industry, plus maybe some payments on Iraq’s foreign debt, we’re down to $750 per capita. Let’s assume that income is distributed as fairly as it is in the United States. The bottom 40% of Iraqis would therefore receive 12% of the income. I.e., a poorer-than-average Iraqi in 2010 could expect to receive perhaps $200/year or so in oil money or benefits derived from oil revenues.
Having Iraq cranking out lots of oil and holding down oil prices will be good for American SUV owners but even under the most optimistic assumptions it looks as though it won’t do much for the Iraqi in the street.