Iraq’s China embrace not without risks

The Middle Eastern state’s welcome of Chinese investment is understandable, but not unproblematic

Majors—notably BP, Shell and ExxonMobil—are retreating from Iraq given its challenging financial environment, although not solely because of it. The country, which has struggled to attract new upstream investment from large firms in recent years, has come to rely on a shrinking number of companies to operate its largest fields. “All major investors are either looking for another market or for another partner,” says Iraqi oil minister Ihsan Ismael. Why does this matter? The twin shocks of low oil prices and the Covid-19 pandemic caused Iraq’s GDP to contract by 10.4pc in 2020 and led to a painful currency devaluation. With oil export revenues accounting for over 90pc of the state budget and I