Entering a New Oil Era

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A: Even without the insurgency, it would have taken time for the Iraqis to sort out what they want to do with their oil industry. Right now Iraq is a second-tier exporter, and its exports are running below last year's. The Iraqi oil industry needs somewhere around $40 billion in investment to start to produce on a scale commensurate with its reserves. That takes not only time and money but also stability, security and some political consensus.

Q: With all this going on in the oil market, what's the big-picture view?

A: My next book will be about how intertwined oil and geopolitics are. There was a period in the '90s in which all these issues of security were brushed aside. Now we realize oil and the fates of nations are all very tied together.