Gwynne Dyer: Oil wealth may hold Iraq together

As the American withdrawal gains speed, there are fewer American troops in Iraq than in Afghanistan for the first time since 2003.

By the end of August there will be no US combat troops left in Iraq, though some tens of thousands of support troops will remain until next year. And still there is no new Iraqi Government, although it is now four months since the election on March 7.

US Vice-President Joe Biden was in Baghdad at the weekend urging Iraqi politicians to end the political deadlock. But America's influence over events in Iraq has been falling as fast as its troop numbers.

In the end, the same broad coalition of Shia Arabs and Kurds that ran the country before will probably rule again, excluding the Sunni Arabs, but it's unclear who will lead the new coalition.

The last election made Iraq's sectarian and ethnic rivalries even sharper, if that is possible. The corruption is universal and shameless.

Dozens of people are still being killed by suicide bombers every week. But the country cannot really fail, because there is just so much oil.

After three decades of foreign wars, UN sanctions and American occupation, Iraq's oil exports bottomed out at 1.8 million barrels per day in 2008, but they are already back up to 2.5 million barrels per day - and Baghdad plans to be producing 9.9 million barrels per day 10 years from now.

That would make it the world's first, second or third-largest exporter (depending on what happens to Saudi Arabian and Russian production), and drown it in a tidal wave of cash.

The target is plausible, because this is not speculation about production from new oilfields - it is just enhanced production from existing fields.

Contracts to build the infrastructure to pump that extra oil have already been signed with two dozen foreign oil companies. Since the foreigners are only paid a fee per barrel, Iraq gets most of the profits.

On the reasonable assumption the price of oil will not drop below $50 per barrel in the next decade, that means the Iraqi Government will have an oil income of at least $150 billion a year by 2020.

Two-thirds of the current Government's income is stolen by the political elite and there is no reason to think that this will change, but that would still allow some $50 billion a year to trickle through and serve the needs of ordinary Iraqis.

That is probably enough to buy the grudging loyalty of most Shia Arabs to the Iraqi state. The Kurds are a different case, but the hostility of all their neighbours to full Kurdish independence will probably persuade them to maintain their current semi-detached relationship with Baghdad.

And the Sunni Arab minority can be either bought off or repressed.

In the old days, there might have been a popular revolution to sweep away the emigre elite that came back from the US, Europe and Iran to feed off the long-suffering Iraqi people, but those days are gone.

After Abdulkarim Qasim, the Baathists, Saddam Hussein, and the Americans - 50 years of disappointment - the Iraqis don't believe in saviours any more. Won't Get Fooled Again could be the national anthem.

All the Iraqis can reasonably hope for, in the aftermath of the US occupation, is corrupt governments riven by sectarian and ethnic divisions, but that is probably a stable outcome provided there is enough money.

And to be fair to the Americans, no other post-Saddam, post-occupation outcome was ever likely.

So what happens in the next few months? The union last month between outgoing prime minister Nouri al-Maliki's secular but overwhelmingly Shia State of Law Party and the two religious Shia parties in the Iraqi National Alliance creates a bloc that is within striking distance of a parliamentary majority.

Recreate the alliance with the Kurds that Maliki had in the last coalition, and the deal is done.

That coalition has not yet happened because Maliki would almost certainly not be the prime minister in it: one of the Shia religious parties, led by Moqtada al-Sadr, hates him too much.

The coalition talks may continue at a stately pace down to September as Maliki seeks to stay in power, but he will probably fail.

His only hope is to make a deal instead with Iyad Allawi's Iraqiyya party, which got most Sunni Arabs' votes across the west and north of the country, but also significant support from secular Shias in and around Baghdad.

But the Kurds would probably not join such a coalition, because Iraqiyyah ran on an anti-Kurdish platform across northern Iraq - and besides, Allawi and Maliki cannot stand each other.

Some sort of deal will be done in the end, because the spoils of power are just too tempting.

Meanwhile, the Americans are leaving as quietly as possible. As quietly, that is, as you can move 1900 heavy tanks and fighting vehicles, 43,000 trucks, 600 helicopters, and 34,000 tonnes of ammunition.

Some of this stuff will go straight back to the United States, but quite a lot of it will be repaired in Kuwait and then sent on to Afghanistan.

The "dumb war", as President Obama called it, is over. The almost-as-dumb war continues.

* Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.