Unrest in Iraq could skyrocket oil prices, providing ammunition for repeal

Energy and natural gas guru T Boone Pickens told CNBC on Friday that if Iraq’s oil supplies dry up as a result of unrest in the country, crude could hit $150-$200 a barrel, providing ammunition for those who want Alaskans to vote on an initiative in August to repeal the oil tax regime that passed the Legislature in 2013.

Iraq produces about 3.3 million barrels a day, and has the world’s fifth-largest proven oil reserves. It’s OPEC’s second-largest producer, after Saudi Arabia,

Insurgents have seized cities in northern Iraq and are only about 40 miles from Baghdad.

As of Thursday, the last day the Alaska Department of Revenue calculated the price, Alaska North Slope Crude hit $111.43 a barrel on the spot market, which is as high as it’s been in about a year.

West Texas Intermediate (WTI) hit $107.68, a 9 month high. Brent rose to $114.69. All three, Alaskan North Slope Crude, Brent and WTI—trade separately to different markets.

If Pickens is right and the prices rise, those who are advocating to repeal the oil tax that passed the Legislature in 2013 will likely make it an issue.

The new tax regime, unlike the old, doesn’t contain a windfall tax, or “progressivity,” And all things being equal, the state won’t rake in the haul that it would under the oil regime if prices skyrocket.

To further zoom in: If things stay chaotic in Iraq, the 2003 invasion, which is at the heart of all the mess, is likely to play at least a small role in the upcoming Senate race. Remember that in 2003, former DNR Commissioner and GOP Senate candidate Dan Sullivan was in D. C., working in the White House, with the National Security Council.

Zooming further in yet: The Keystone Pipeline, which Sen. Mark Begich supports but his party has blocked, could help provide a stable source of oil from a country that’s not on the verge of being overtaken by jihadists.