Iraq wants to crush U.S. shale, but will end up pounding sand
Seeing Saudi Arabia beat its head against the wall has been so fun that now Iraq’s petro-military apparatus has decided it, too, wishes to flood the world’s oil market with fresh supply and bring U.S. shale producers to their knees.
To put this in terms Iraqis may grasp: Please do. Texans will meet you in the street with yellow roses.
Short of giving away a city to Islamic State (as it did last weekend), Iraq could hardly do anything less in its own interest. It will cost Iraq money it doesn’t have — and can’t easily borrow. So the gambit to boost production by 800,000 barrels a day won’t last, and won’t matter. Ultimately, the drama will highlight why the price of oil is likely to stay near where it is for now, and drift lower over time.