Oil production in Iraq's Shiite-majority southern region has been steadily rising in recent years since the Rumaila, West Qurna Stage 1 and Zubayr supergiant oil fields were auctioned off to foreign companies in 2009. Sitting on 115 billion barrels of proven oil reserves, more than 80 percent of which is concentrated in the south, Iraq has the potential to rival Saudi Arabia's production rate of roughly 10 million barrels per day (bpd) within the decade. Iran is especially interested in the prospect of increased oil production in southern Iraq. Tehran has built a complex oil smuggling network that allows it to bring in significant revenues from southern Iraq's oil production. According to Stratfor sources, roughly 10 percent of Basra's oil production is smuggled, most of which ends up in Iran for export. The market value of the oil that is stolen each day is roughly $20 million, enabling Iran to maintain its influence in the region while preparing to defend itself against more stringent sanctions against its oil exports. The main smuggling route from Iraq to Iran begins at the Khor al-Zubayr oil terminal, where the bulk of Iraq's southern oil converges. Smugglers will drill holes in the pipeline at the oil terminal and load containers of oil into small boats. The boats are manufactured locally in Basra and typically carry between 70 and 120 barrels of crude. From there, the boats take the crude down the Khor al-Zubayr waterway out to the Persian Gulf, where it is loaded onto tankers bound for Iran. Thefts also occur farther down the smuggling route near al-Faw Peninsula, where smugglers make holes in underground pipelines, using hydraulic perforation equipment to avoid fires. From the al-Rasas island near al-Faw Peninsula, crude can travel by boat up the Bahmanshir River (a tributary of the Karun River) to the Abadan refinery in Iran for processing and export. Oil smuggling along the river known as the Shatt al Arab also occurs, though it is much less common due to the hazardous nature of the waterway and increased monitoring along the route. High-speed Iraqi boats are used to travel along the Shatt al-Arab to Iranian territorial waters to unload their cargo, but the route is costly due to the number of bribes that need to be paid along the way.
