Iraq is leaning more than ever on foreign companies to keep its oil industry running, and two big players are now at the center of it all: China and the United States. Chinese firms control huge parts of Iraq’s oil fields, while American companies are making a noticeable comeback. And according to experts, many of Baghdad’s recent decisions are being driven by politics, not economics.
Oil expert Hamza al-Jawaheri told dinaropinions.com that Iraq’s decision to invite only American companies to develop the West Qurna-2 field — one of the country’s most valuable fields in Basra — is a clear attempt to balance China’s growing influence. He said the government wants to show Washington that it “is not being marginalized,” especially as Chinese companies now dominate many of Iraq’s biggest producing fields.
Even if a U.S. company takes over West Qurna-2, he added, the deal would still follow Iraq’s technical-service model, meaning no company would get a share of the oil itself.
The invitation came after Russia’s Lukoil declared force majeure on its 75% stake in the field due to sanctions disrupting its operations.
China’s Growing Oil Presence
Chinese companies have cemented themselves in almost every corner of Iraq’s oil sector. CNPC and PetroChina are involved in major fields like Ahdab, Halfaya, Rumaila, and West Qurna-1. Others — including Sinopec, Geo-Jade, Zhenhua Oil, United Energy Group, and Zhongman — are spread across fields and blocks from Mansuriyah and Sumer to Siba, Fao, East Baghdad, and the Middle Euphrates.
Their investments keep expanding. In 2025, a Geo-Jade–led consortium committed $848 million to grow the Tuba field and build a 200,000-barrel-per-day refinery, a petrochemical complex, and two power plants. Zhenhua Oil plans to double its output by 2030, and Zhongman has put $481 million into developing blocks it won in 2024.
A New Push From the U.S.
After years of limited activity, American companies are stepping back into Iraq. ExxonMobil signed a major agreement in October 2025 to develop the Majnoon field and upgrade export infrastructure in Basra.
In August, Iraq reached an initial deal with Chevron covering exploration blocks and producing fields under the larger Nassiriya project.
HKN Energy made an early agreement in July to help develop the Hamrin field, and engineering giant KBR secured a renewed contract to manage projects at Majnoon.
Experts say the renewed U.S. interest comes from Iraq’s ideal mix: low extraction costs, huge reserves, and large-scale projects that big companies need as their fields elsewhere decline. Some Chinese firms also say Iraq has become more attractive thanks to smoother policies and better investment conditions.
A Sector Built on Foreign Partnerships
Iraq — OPEC’s second-largest oil producer — wants to boost its production capacity by more than 50% and reach over six million barrels per day by 2029. But this goal depends heavily on foreign companies. Studies show that around 70% of Iraq’s current production is handled by foreign operators, a reliance that continues to grow.
That’s why Baghdad’s recent outreach to American firms at West Qurna-2 is about more than one field — it’s about balancing China and the United States at the same time. Iraqi officials see both relationships as essential: China brings low-cost, large-scale development, while the U.S. offers advanced technology, export expertise, and important political ties.
As Iraq prepares to choose a new operator for West Qurna-2, the decision could reshape how much influence China and the United States each hold over Iraq’s wider oil sector.
