Iraq is hoping to scale up investment by US companies, Iraqi prime minister Ali al-Zaidi told President Donald Trump during a meeting at the White House on Tuesday.
Trump said he expected major deals to be announced shortly, without providing details. "We have tremendous oil partnerships all of a sudden being formed over the short period of time," Trump said, attributing the spike of interest in Iraq to his decision to attack Iran.
Al-Zaidi, who took office in May, inherited an economic crisis caused by the effective closure of the strait of Hormuz in March-June. US-Iranian clashes, which escalated on 7 July, have again constricted energy flows through Hormuz after a brief resurgence of flows in mid-June followingan interim US-Iran deal. The US resumed a naval blockade of Iran at 4pm ET (20:00 GMT) on Tuesday. Vessel traffic through the strait of Hormuz remained at minimal levels over the past day, according to MarineTraffic.
Al-Zaidi's government has so far managed to balance relations with Washington and Tehran during the US-Iran war. Al-Zaidi's government represents Iraq's Shiite Co-ordination Framework, which is aligned with Tehran. But Trump heaped praise on al-Zaidi — "The prime minister of Iraq has been amazing" — and took credit for his nomination. Al-Zaidi emerged as a compromise candidate after the US had rejected the bloc's earlier nomination of former prime minister Nouri al-Maliki, seen by Washington as too aligned with Tehran.
Iraq in recent weeks accelerated efforts to boost crude productionand diversify export routes after approving a series of agreements with Chevron, US oil services firm Halliburton and other international partners, while moving to extend the operation of its northern export pipeline to Turkey for another year. Argus estimates Iraqi crude output was 2.15mn b/d as of June, well below its Opec+ target of 4.35mn b/d, because of constraints on seaborne exports.
Baghdad is welcoming new US oil investment and, at the same time, preparing for the scheduled departure of the remaining US troops from Iraq on 30 September, al-Zaidi said. "US forces will be out of Iraq while these companies will be inside Iraq," he said.
The US and Iraq agreed on the 30 September deadline for the departure of US forces in 2024, under former US president Joe Biden. The remaining US forces are positioned in bases in northern Iraq's Kurdistan region, where they came under repeated missile and drone attacks from Iran in March-April.
"We don't think we need the military there any more," Trump said. "What we do have is the oil companies are all going in now and they're doing partnerships with Iraq, and they're getting along very well."
In Trump's telling, renewed interest from US companies in Iraq testified to the success of his military campaign against Tehran.
"Iran has been very much destabilized and their military power is just a tiny fraction of what it was just four months ago," Trump said. "I think that's one of the reasons that our oil companies are going in there at levels that have never been seen before."
Trump prodded al-Zaidi to confirm that the 2020 killing of senior Iranian military commander Qassem Soleimani in a US strike in Baghdad has reduced Iran's influence in Iraq.
"At that time, I was not in politics," said Al-Zaidi, who had been a businessman with interests spanning banking, trade and food supply networks before his appointment. "During my visit, I'd like to talk about the future, we are fed up with the past," he told Trump.
