Iraq's Trade with the World: Data and Analysis

Publication Date: March 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Economics

Type:

Coverage: Iraq

Abstract:

In the last 25 years, Iraq's economic involvement in the world market has fluctuated dramatically -- fluctuations brought about, in part, by damage to its oil infrastructure during the Iran-Iraq War of the 1980s, followed by a multinational military response and years of multilateral economic sanctions as a result of its 1990 invasion of Kuwait.

Economic stability in Iraq has depended on exports of crude oil since the end of World War II. Exports of oil accounted, on average, for 83% of Iraq's annual exports from 1980-1990 and virtually all exports since 1996. When international economic sanctions were imposed in August 1990, Iraq's oil sales dropped from $10.2 billion in 1990 to $305 million in 1991. From 1991 to 1995 the regime of Saddam Hussein declined to accept United Nations (U.N.) proposals seeking to permit Iraq to sell limited quantities of oil to meet the needs of its people. Without oil export revenues, living conditions in the country deteriorated sharply.

In 1996, the Iraqi government agreed to the establishment of a United Nations administered Oil-For-Food Program (OFF) that allowed the Iraqi government to export limited amounts of oil and import food and humanitarian supplies under close supervision. On May 22, 2003, the U.N. Security Council adopted Resolution 1483, lifting all civilian trade sanctions on Iraq and providing for the termination of the OFF.

Since Iraq's chief export product is crude oil, the country's economic future, at least in the short term, depends on its ability to tap into its vast oil resources. According to U.S. Department of Energy statistics, Iraq has 115 billion barrels of proven oil reserves, and possible reserves of as much as 220 billion barrels. Due to years of war combined with the excesses of the Hussein regime, its oil potential has been largely unexplored and only 17 of 80 discovered oil fields have been developed.

Despite concerns over continued insurgent activity and the stability of the interim government that have scared away much foreign investment by major corporations, the Bush Administration officials and others report that Iraq's economy is doing well. The U.S. government is engaged in efforts to attract small and medium U.S. businesses to work and invest in the country as subcontractors on U.S. government contracts and in the private sector. The United States has lifted most international trade sanctions with respect to Iraq in keeping with United Nations Security Council Resolution 1483, and has designated Iraq as a beneficiary developing country under the Generalized System of Preferences.

This report provides detailed trade information and statistics on Iraq's trade with the world from 2001 to 2003 (latest data available), highlighting its major trading partners. Data on U.S. trade with Iraq from 2002 to 2004 are also provided. The report will be updated as events warrant.