Billions of dollars of oil theft in Iraq: Technology one potential solution, experts argue

They say hundreds of millions of dollars can be saved every month, billions every year, if Iraqi authorities utilise simple and low-cost technologies in preventing the theft and smuggling of Iraqi oil.

The theft and smuggling of oil is a major issue in the county.

It costs the country $750 million every month, $9 billion every year. This makes up almost 15 percent of overall revenues from the export of Iraqi oil during the first six months of this year.

Since the beginning of the year, the value of exports amounted to $61.4 billion, almost two times the value of exports in the corresponding period in 2021.

Smugglers create holes in the country’s extended oil pipelines, siphon the oil into tanker trucks and then smuggle it out of the country.

This was exactly where nine senior Iraqi Interior Ministry officers were implicated, a crime that grabbed the attention of the Iraqi public in recent days.

The officers reportedly collaborated with oil smuggling rings in transporting oil out of the southern province of Basra and into the northern Kurdistan region where it was moved across the border to Syria and other countries.

Such thefts can, however, be easily prevented, Iraqi technology expert, Mohamed Ali, said.

He suggested using the Supervisory Control and Data Acquisition (SCADA) system in monitoring oil pipelines and tracking down thieves who pump the oil out of the main network in illegal manners.

SCADA comprises computers, networked data communications and graphical user interfaces for high-level supervision.

“Dependence on the system would uncover Iraqi oil pumped out of the pipeline system unlawfully,” Ali told Arabian Business in an interview.

The issue of oil theft and smuggling was raised recently by Iraqi Prime Mohammed Shia’ al-Sudani who is apparently in an anti-corruption drive.

Oil theft and smuggling has been encumbering the country’s economy for a long time now.

According to the former Iraqi president, Barham Salih in May last year, the county lost $150 billion because of oil theft and smuggling since the US-led invasion of his country in 2003.

Smuggling rings pump crude and oil derivatives into tanker trucks that take them to buyers outside the country.

Another Iraqi expert suggested an easy way to prevent the tanker trucks from being used in this dirty business.

Jamal al-Assadi, a legal expert and a retired Interior Ministry inspector, said this can be done by fitting Global Positioning System (GPS) devices to all oil tanker trucks in Iraq.

“This will put an end to 90 percent of oil smuggling operations,” al-Assadi told Arabian Business.

There are 1,820 oil tanker trucks of different sizes in the country and fitting GPS devices to all these trucks will cost the Arab country between $91,000 and $182000, with each device costing between $50 and $100.

The devices, al-Assadi said, would track down the oil tanker trucks and send reports about their places in Baghdad and other provinces to control rooms.

This, he believes, will put Iraqi authorities in control over the tanker trucks and help them locate them, especially if the trucks break out of their scheduled routes.