F. 4B
Helen Cheung
(6)
Iraqi oil close to pre-war levels
Iraqi oil output is close to pre-war levels despite continued terrorist attacks, a
state official has told AFP.
Most of the production is coming from the south of the country where bombings are less
frequent than in the north.
The country's interim administration has been criticised for failing to halt the attacks which
have often targeted pipelines.
On Monday, an important gas pipeline was destroyed close to Kirkuk, hurting supplies to the
largest oil refinery.
State oil
Production of crude is currently at 2.2 million barrels a day (b/d), Shamkhi Faraj, director of
the State Oil Marketing Organization, told AFP news agency.
He said they hope to hit pre-war levels of 2.8 million b/d by March of next year.
Exports will also rise, climbing to between 2 million and 2.1 million b/d in March.
The price of oil has increased on the international market this year partly as Iraq's output
slumped following the US-led invasion in March.
The Organisation of Petroleum Exporting Countries is mulling production cuts to offset an
increase in Iraqi and Russian output.
Mr Faraj said Iraq would not need a large amount of investment to get to 3 million b/d.
The ministry expects production to reach as much as 4 million b/d by the end of 2005.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/3236304.stm
Published: 2003/11/25 12:53:13 GMT
© BBC MMIII
1
F. 4B
Helen Cheung
(6)
News Report
Since the war in Iraq, the oil outputs had decrease. Iraq was defeated by USA, there are so
many terrorist attacks in Iraq. Although oil pipelines usually become the target of terrorist
attracts, the oil outputs is close to the pre-war level. The director of the State Oil Marketing
Organization expects the Iraq oil to hit pre-war level by March of next year. By the end of
2005, Iraq oil will reach 4 million b/d.
Oil is one of the most important energy resources in the world. Oil is used for industry,
transportation, electricity supply, etc. Without oil, it will bring us great and serious problem.
Iraq Oil is rich in Middle East, for example Iraq. But there is no oil in some more developed
countries, such as Japan and USA. It is insufficient to satisfy all people’s wants. People prefer
more oil and they have to pay or give up something to get it. There is a positive cost of
production. It is an economic good in all over the world.
Supply refers to the quantity of good a person is willing and able to sell at given price over
a period of time, ceteris paribus. Quantity supplied refers to the quantity a person is willing
and able to sell at one particular price. The supply curve of oil in Iraq is affected by the war,
not because of the price. Therefore it is related to the change of supply. During the war, there
is a decrease in supply of oil in Iraq. There is an increase of equilibrium market price but a
decrease in equilibrium quantity transacted. There are other countries also export their oil in
order to offset a decrease in Iraq’s oil supply. They are the substitutes of Iraq’s oil. They can
be replaced by each other. After the war, the supply of oil in Iraq becomes closer to pre-war
level. There is an increase in supply. There is a decrease in equilibrium market price but an
increase in equilibrium quantity transacted.
A decrease in supply (S1->S2) leads
to an increase in the equilibrium
price (P1->P2) but a decrease in
equilibrium quantity transacted
(Q1->Q2).
2
F. 4B
Helen Cheung
(6)
An increase in supply (S1->S2)
leads to a decrease in the
equilibrium price (P1->P2) but an
increase in equilibrium quantity
transacted (Q1->Q2).
3