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<div class="gmail-inner-article-top"><h1 class="gmail-">After the invasion: Who really took Iraq\u2019s oil?</h1><p class="gmail-">The
US-led war pried open Iraq\u2019s energy sector, but the oil order that
followed did not unfold as its architects expected. Chinese firms now
occupy much of the ground western majors abandoned.</p><div class="gmail-another-name"><p><a href="https://thecradle.co/authors/hussein-askary-123" style="color:rgb(164,4,4)">Hussein Askary</a></p></div><div class="gmail-another-name" style="margin-top:16px"><p><span style="color:rgb(84,88,94)">AUG 10, 2026 -<font size="1"> </font></span><font size="1"><a href="https://thecradle.co/articles/after-the-invasion-who-really-took-iraqs-oil">https://thecradle.co/articles/after-the-invasion-who-really-took-iraqs-oil</a></font></p></div></div><div class="gmail-inner-article-img"><img src="https://thecradle-main.oss-eu-central-1.aliyuncs.com/public/articles/631b6f74-94d9-11f1-a57c-00163e02c055.webp" alt="" width="450" height="213" style="margin-right: 0px;"><span>Photo Credit: The Cradle</span></div><div class="gmail-inner-article-content"><div class="gmail-row"><div class="gmail-col-md-8 gmail-col-sm-7"><div class="gmail-article-content"><span class="gmail-article-body"><p><span style="background-color:transparent">It is often said, almost as a matter of common sense, that the US and Britain invaded Iraq in 2003 to seize the country\u2019s oil. </span></p><p><span style="background-color:transparent">The
charge carries political force. Iraq possesses some of the world\u2019s
largest conventional reserves; oil companies from the invading states
entered after the occupation; and the war was followed by a sweeping
reorganization of the Iraqi state and economy. </span></p><p><span style="background-color:transparent">Yet
the identity of the companies now most active in Iraq\u2019s fields
complicates that slogan. If the aim was simply to hand Iraqi oil to US
and British firms, the result is strikingly paradoxical: Chinese
companies now hold a commanding position in the upstream sector.</span></p><p><span style="background-color:transparent">The
fact check does not exonerate the invasion, nor does it remove oil from
the story \u2013 nor should the oil motive be treated as the only motive.
One key motive is that the US and Britain used the Iraq War to assert a
new Anglo-American doctrine above the UN Charter-based, Westphalian
system of sovereign and independent nations. </span></p><p><span style="background-color:transparent">At
a moment when Russia was still weakened by the post-Soviet collapse,
and China had not yet become the formidable power it is today, the
invasion served notice that Anglo-American power, rather than
international law, intended to arbitrate world affairs.</span></p><p><span style="background-color:transparent">That
domination also took a financial form. Executive Order 13303, issued in
May 2003 and renewed by successive US administrations, protected Iraqi
petroleum proceeds from attachment in US courts. The original
Development Fund for Iraq (DFI) ended in 2011, but </span><a href="https://thecradle.co/articles/why-does-the-us-still-control-every-penny-of-iraqi-oil-revenues"><span style="background-color:transparent">Iraqi oil revenues still flow</span></a><span style="background-color:transparent">
into a Central Bank of Iraq account at the Federal Reserve Bank of New
York, giving Washington leverage over Baghdad\u2019s access to dollars. </span></p><p><span style="background-color:transparent">A </span><a href="https://www.reuters.com/business/energy/how-us-controls-iraqs-oil-revenues-2026-01-23/"><span style="background-color:transparent"><i>Reuters</i> investigation</span></a><span style="background-color:transparent">
published in January 2026 described this as effective US control over a
critical choke point in Iraqi state finance. The arrangement is not the
same as corporate ownership of the oil, but it exposes the political
economy behind the occupation more clearly than a simple tale of
physical plunder.</span></p><p><span style="background-color:transparent"><strong>The contract Iraq kept</strong></span></p><p><span style="background-color:transparent">One obstacle facing foreign majors was constitutional and contractual. </span><a href="https://www.constituteproject.org/constitution/Iraq_2005"><span style="background-color:transparent">Article 111 of Iraq\u2019s constitution</span></a><span style="background-color:transparent">
declares oil and gas the property of all Iraqi people. In federal Iraq,
development has largely proceeded through technical service contracts
(TSCs).</span></p><p><span style="background-color:transparent">The
state retains ownership of reserves while foreign companies provide
exploration, drilling, engineering, management, and operating services
in return for cost recovery and a remuneration fee. </span></p><p><span style="background-color:transparent">This
differs from the production-sharing contracts favored by many private
firms and used by the Kurdistan Regional Government (KRG), under which
contractors gain more direct exposure to production revenues and
potential upside.</span></p><p><span style="background-color:transparent">Shell,
ExxonMobil, and BP became prominent in post-2003 Iraq, but tight fees,
payment disputes, security risks, bureaucracy, and infrastructure
bottlenecks made federal fields less attractive than other assets in
their portfolios. </span></p><p><span style="background-color:transparent">Shell </span><a href="https://www.reuters.com/article/business/shell-hands-over-iraqs-majnoon-oilfield-oil-officials-idUSKBN1JN0YD/"><span style="background-color:transparent">left Majnoon in 2018</span></a><span style="background-color:transparent">, transferring operations to the state-run Basra Oil Company. ExxonMobil </span><a href="https://www.reuters.com/article/business/shell-hands-over-iraqs-majnoon-oilfield-oil-officials-idUSKBN1JN0YD/"><span style="background-color:transparent">exited West Qurna-1</span></a><span style="background-color:transparent">
and handed the lead-contractor role to PetroChina at the start of 2024.
BP and PetroChina, meanwhile, transferred their interests in Rumaila to
Basra Energy Company Limited in 2022.</span></p><p><span style="background-color:transparent">Rumaila
is the clearest example. BP became the leading western name associated
with the field, one of Iraq\u2019s largest and most important producing
assets. Yet the operational reality includes extensive Chinese
participation. Basra Energy Company, the field company, reflects the
BP\u2013PetroChina partnership. </span></p><p><span style="background-color:transparent">China
Petroleum Engineering and Construction Corporation won engineering,
procurement, construction and commissioning work for crude-oil
processing facilities. CNPC Daqing Drilling Engineering has been
associated with drilling and EPC work. In other words, a flagship
British-linked oil project in Iraq depends heavily on Chinese technical
execution.</span></p><p><span style="background-color:transparent">Majnoon
tells a similar story in a different sequence. Shell was the lead
operator before exiting. After the western major stepped away, publicly
available project information identifies Chinese EPC and oilfield firms
such as China Petroleum Engineering, China National Petroleum and Hebei
Huabei Petroleum Engineering Construction as contractors involved in
development activity. </span></p><p><span style="background-color:transparent">The
point is not that Shell directly handed every task to a Chinese
company. It is that the western major did not stay to dominate the field
over the long run, while Chinese engineering and service capacity
became an important part of the work needed to keep Iraqi oil
development moving.</span></p><p><span style="background-color:transparent">West
Qurna-1 is more symbolic still. ExxonMobil, the emblematic US major,
once served as lead contractor. By 2024 PetroChina had taken its place.
This was not a Chinese subcontractor operating beneath an American
giant, but the American company leaving as its Chinese counterpart moved
to the front. </span></p><p><span style="background-color:transparent">The
field\u2019s low-remuneration service structure helps explain why Exxon grew
frustrated and why PetroChina was prepared to remain.</span></p><p><span style="background-color:transparent"><strong>China takes the ground</strong></span></p><p><span style="background-color:transparent">The
pattern extends beyond the legacy supergiant fields. Iraq\u2019s newer
exploration, development, and production contracts have accelerated
China\u2019s advance. During the May 2024 licensing round, Chinese companies </span><a href="https://www.reuters.com/business/energy/chinese-companies-win-more-bids-explore-iraq-oil-gas-2024-05-12/"><span style="background-color:transparent">secured 10 oil and gas projects</span></a><span style="background-color:transparent">, while the Kurdish KAR Group won two. </span></p><p><span style="background-color:transparent">The
successful Chinese bidders included CNOOC, ZhenHua, Anton Oilfield
Services, Sinopec, Geo-Jade, Zhongman Petroleum, and United Energy
Group. No US oil major participated. Chinese firms have appeared across
Wasit, Diwaniyah, Baghdad/Wasit, Muthanna, Basra, Najaf, Baghdad/Salah
al-Din, and Najaf/Karbala. The work spans seismic surveys and wildcat
drilling through appraisal, development planning, and early production.</span></p><p><span style="background-color:transparent">The
newer contracts complicate this picture. Baghdad has begun replacing
some older service arrangements with profit-sharing terms designed to
attract investment. In October 2024, CNOOC signed an EDPC for Block 7
under this model. China\u2019s rise in Iraq therefore cannot be explained
solely by its willingness to accept low TSC fees. Chinese firms are
also </span><a href="https://thecradle.co/articles-id/33303"><span style="background-color:transparent">securing</span></a><span style="background-color:transparent"> the more commercially attractive contracts Baghdad is now offering.</span></p><p><span style="background-color:transparent">The
phrase \u201cthe west invaded Iraq for oil\u201d thus requires precision. If it
means that Iraq\u2019s strategic energy position shaped western policy, the
claim remains historically important. Oil never disappeared from the
calculations surrounding the war, from prewar planning to the occupation
authority\u2019s early decisions and the restructuring of the sector.</span></p><p><span style="background-color:transparent">Nor
can corporate outcomes alone settle a question of state strategy. But
if the phrase means US and British companies secured lasting control of
Iraqi production and captured most field-level profits, the evidence
points elsewhere. </span></p><p><span style="background-color:transparent"></span></p><div class="gmail-columns-box gmail-web-view-poll"><div class="gmail-columns-section"><div class="gmail-columns-row"><div class="gmail-poll-card"><div class="gmail-options"><div><p style="float:right;margin-top:23px;font-weight:600;font-size:0.875rem;display:block;color:var(--cdl-secondary)"></p></div></div></div></div></div></div><p></p><p><span style="background-color:transparent">Federal
contracts limited foreign ownership and upside, and several western
majors judged the returns inadequate for the risks. An invasion can
reorganize a strategic sector without producing the simple corporate
spoils its critics expected.</span></p><p><span style="background-color:transparent">Chinese
companies approached the same terrain differently. State-owned groups
and smaller independents alike have accepted demanding conditions, lower
immediate margins, and returns measured over decades rather than
quarters. They draw on integrated supply chains, lower development
costs, Chinese equipment, engineering depth, and a greater tolerance for
political and operational risk. This has allowed them to move faster
and remain where western firms have reduced their exposure.</span></p><p><span style="background-color:transparent">The
logic is strategic as well as commercial. China is the world\u2019s largest
crude importer and plans for energy security across decades. Iraq offers
immense reserves, favorable geology, and comparatively low production
costs, even when politics and infrastructure complicate operations. </span></p><p><span style="background-color:transparent">China is also a </span><a href="https://thecradle.co/articles/chinese-energy-firms-top-buyers-of-iraqi-oil"><span style="background-color:transparent">major buyer of Iraqi crude</span></a><span style="background-color:transparent">,
linking participation at the wellhead to a much wider trading
relationship. A modest fee today can secure relationships, geological
knowledge, infrastructure positions, crude-supply links, and diplomatic
influence tomorrow. </span></p><p><span style="background-color:transparent">The
value may accrue across a state-backed corporate ecosystem rather than
on one project\u2019s balance sheet. Iraq is therefore not merely an oilfield
balance sheet for Beijing, but part of an energy map spanning the
Persian Gulf, Central Asia, Africa, and the wider Belt and Road
geography.</span></p><p><span style="background-color:transparent">Western
majors answer to a different set of pressures: shareholder returns,
capital discipline, and portfolio performance. They seek high-margin
barrels, regulatory predictability, and contractual upside. </span></p><p><span style="background-color:transparent">When
Iraq combined difficult operations with limited remuneration, several
reduced their exposure, divested, or relied more heavily on contractors.
Chinese firms increasingly performed the less celebrated but
indispensable work of drilling, fabrication, project management, and
incremental development \u2013 the work that turns Iraqi geology into
production.</span></p><p><span style="background-color:transparent">The
same industrial shift is visible beyond Iraq. Chinese yards and
engineering companies have fabricated modules and hulls for western-led
offshore projects in Brazil and Guyana. These examples do not mean
Chinese contractors control Shell or ExxonMobil. </span></p><p><span style="background-color:transparent">They
point to a subtler dependency. Even where western majors remain
operators, a growing share of the industrial base required to build
complex energy infrastructure is located in China.</span></p><p><span style="background-color:transparent"><strong>The Kurdish exception</strong></span></p><p><span style="background-color:transparent">A different arrangement developed in the </span><a href="https://thecradle.co/articles-id/7278"><span style="background-color:transparent">Kurdistan Region</span></a><span style="background-color:transparent">,
where companies including DNO, Genel Energy, Gulf Keystone Petroleum,
HKN Energy, and Hunt Oil operated under production-sharing contracts. </span></p><p><span style="background-color:transparent">These
offered more direct exposure to production revenues and resembled the
terms private western companies often prefer. They also became the
center of a long constitutional struggle between Erbil and Baghdad over
who could sign contracts, market crude, and receive the proceeds. </span></p><p><span style="background-color:transparent">Iraq\u2019s
Federal Supreme Court ruled the KRG oil and gas law unconstitutional in
2022, while the closure of the Iraq\u2013Turkiye export pipeline in 2023
further exposed the model\u2019s legal and financial fragility. </span></p><p><span style="background-color:transparent">Federal
Iraq\u2019s TSCs preserved stronger formal state ownership but offered less
upside. Western firms consequently became more visible where contracts
resembled production sharing, while Chinese companies proved more
willing to work within Baghdad\u2019s service-contract system and, later, its
hybrid profit-sharing adaptations.</span></p><p><span style="background-color:transparent">Many
observers in Iraq fear that the current government might seek to
generalize this model to curry favor with Washington, which exercises
significant influence over the Iraqi economy through E.O. 13303. While
Article 111 establishes public ownership of oil and gas without
prescribing a single contractual model, such an expansion could
intensify disputes over federal authority, revenue distribution, and the
absence of a comprehensive oil and gas law. Oil supplied </span><a href="https://www.eia.gov/international/content/analysis/countries_long/Iraq/pdf/iraq_2024.pdf"><span style="background-color:transparent">roughly 95 percent</span></a><span style="background-color:transparent">
of Iraqi government revenue in 2022, according to the US Energy
Information Administration. Manufacturing and agriculture were badly
damaged by war, sanctions, underinvestment, import dependence, and
post-2003 mismanagement. </span></p><p><span style="background-color:transparent">To
attribute their decline solely to the 1990s embargo and Anglo-American
rule would conceal other causes, but Iraq\u2019s failure to diversify has
left the state exceptionally vulnerable to oil prices and external
financial pressure.</span></p><p><span style="background-color:transparent"><strong>An occupation\u2019s unintended order</strong></span></p><p><span style="background-color:transparent">The
conclusion is not that China \u2018stole\u2019 oil that Washington and London had
intended to seize. Under the federal model, Iraq\u2019s reserves remain
state property. Nor was western power irrelevant. The war opened Iraq to
international oil companies, while the dollar system created after the
invasion preserved </span><a href="https://thecradle.co/articles-id/1570"><span style="background-color:transparent">extraordinary US leverage</span></a><span style="background-color:transparent">. </span></p><p><span style="background-color:transparent">But
the contracts and political conditions did not yield the high-profit
field order western majors preferred. Chinese companies, backed by lower
costs, strategic patience, and a longer view of energy security,
occupied much of the space they left behind.</span></p><p><span style="background-color:transparent">Iraq
has consequently become a case study in the changing balance of global
power. The older image was of western armies clearing a path for western
oil companies. </span></p><p><span style="background-color:transparent">Chinese
companies have taken a different approach. Both state-owned firms and
smaller independents have entered difficult projects offering limited
short-term returns. Lower costs, domestic supply chains, Chinese
equipment, and extensive engineering capacity have helped them withstand
risks that drove several western majors to scale back or leave.</span></p><p><span style="background-color:transparent">The
invasion\u2019s oil legacy is therefore found less in direct Anglo-American
possession of the fields than in the system built around them: an
economy still overwhelmingly dependent on crude exports, revenues routed
through New York, and an industry opened to foreign capital on terms
Baghdad has repeatedly revised.</span></p><p><span style="background-color:transparent">Yet
the companies most willing to work those fields are increasingly not
from the states that invaded Iraq in 2003. They are Chinese \u2013 and their
rise is one of the clearest signs that the postwar order escaped the
hands of its architects.</span></p></span></div></div></div></div>
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