For nearly three decades, oil prices have been controlled primarily by the oil cartel - OPEC, through the control it has on majority of oil producing countries. That may no longer be the case if America succeeds in its objective of having a major say in Iraq's affairs. Iraq's oil industry is capable of far higher production and could break the Saudi hold on OPEC. A fresh price war among producers is not ruled out because OPEC might be forced to change its policy of defending prices and its market share.

After Saudi Arabia in the Middle East, Iraq possesses the world's second-largest oil reserves, estimated at 112.5 billion barrels, or 11% of the world's totalmore than five times the size of US reserves. However, despite sitting pretty on such huge reserves, the beleaguered country currently supplies only 3% of the world's oil. The country has massive untapped reserves; about 90% remains unexplored. Oil production costs are among the lowest in the world, making it an extraordinarily profitable source. It also controls nearly 3.1 trillion cubic meters of natural gas to rank among the top 10 gas powers, but most of this wealth has remained untapped. It is not a surprise that there is not an oil company in the world that doesn't eye Iraq. More than a decade of UN sanctions have taken their toll on Iraq's oil reservoirs.

Under the sanctions, Iraq was not assigned OPEC (Organization for Petroleum Exporting Countries) quota and the oil-for-food program regulated its exports. Under this scheme, Iraq was allowed to sell up to 2 million barrels per day, provided the revenues were used for humanitarian assistance to the Iraqi people and the repayment of Iraq's war debts to Kuwait.

Cover Story, Oil Prognosis, Post-war era, Oil, OPEC, Oil & Petroleum Exporting countries, defending prices, market share, oil reserves, billion barrels, US reserves, huge reserves, beleaguered country, massive untapped reserves, profitable source, oil reservoirs, UN sanctions,sanctions, humanitarian assistance.