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Last week, the Deputy Prime Minister said, according to reliable reports, the country’s reserves may total 350 billion barrels putting it ahead of Saudi Arabia. Negotiations for western contractors to participate in developing Iraq’s oil fields are still bumping along despite the country’s inability to pass a comprehensive oil law.

Among those most unhappy with the current situation are members of US Congress who are faced with a request for another $108 billion in war funding and are wondering when Iraq can shoulder some of the load. US auditors, however, report that Iraq still does not have the institutional capacity to contract for and spend the revenue on oil and other forms of infrastructure or to crack down on massive corruption in the country.

The security situation in Iraq is still not safe enough for foreign contractors and in recent weeks, US casualties have increased. Many Iraqi’s see no obligation to start paying for their own reconstruction, maintaining that it was the US that started the current round of disruptions. In the meantime Iraq’s oil refining, electricity, and water infrastructure continues to deteriorate.

5. Energy Briefs

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China's consumption of gasoline, diesel and kerosene increased 16.5% over the previous year, hitting new record highs. China’s production of oil only increased 2.2% while imports increased 14.9%. China imported just under 50% of the oil they consumed. Reuters suggests that the current surge in gasoline and diesel imports is related to the Olympics and that imports will subside in the autumn. (4/29, #10; 5/1, #8)

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Russia, the world’s second-largest oil supplier, produced the least crude oil in 18 months in April as aging fields and rising costs threaten the country with the first annual decline in oil output in a decade. April production was 0.8% less than April 2007 and 0.4% less than March 2008. Last month Russia’s two largest independent oil companies said that the country’s oil production may have peaked. (5/2, #2)

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Mexico will reduce its crude oil exports to the US by an average of 184,000 b/d throughout 2008, a situation that could continue for 2 years longer, reported a Mexican media outlet. (4/30, #9)

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Some kinds of fertilizer have nearly tripled in price in the last year. That is one of many factors that threaten to push tens of millions of poor people into malnutrition. Without nitrogen fertilizer, there would not be enough food for 40 percent of the world’s population, at least based on today’s diets. (4/30, #20)