But there are also political pitfalls: Iraq's energy boom makes a tempting target for Iran as it battles a salvo of sanctions imposed by the United Nations, the United States and the European Union in recent weeks with the aim of throttling its vital oil industry.

"The map of the world's main energy suppliers is about to change," veteran Middle East observer Patrick Cockburn wrote in London's Independent newspaper July 1 of Baghdad's plan to boost oil production from around 2 million barrels per day to 10 million-12 million bpd over the next seven years.

"The rush to exploit Iraq's 'super-giant' oil fields, of which it has the largest concentration in the world, has gathered impetus with unexpected speed in the wake of BP's disaster in the Gulf of Mexico which has raised fears over deep-sea drilling," he wrote.

"Iraq's oil has the advantage of being both onshore and cheap to develop."

Iraq has oil reserves estimated at 115 billion barrels, the third largest reserves of conventional crude after Saudi Arabia and Iran. And the production increase is expected to come from these established fields.

But it's Iraq's untapped oil wealth that is the clincher. Industry analysts believe that reserves of 100 billion barrels lie in unexplored fields. No other oil state possesses anything like that.

That means that as the reserves of other producing states such as Saudi Arabia, Iran and the United Arab Emirates steadily shrink, Iraq will be able to keep oil flowing from new fields as the older ones dry up.

The Saudis aren't happy at the prospect of being usurped by Iraq and they will probably seek to prevent that happening, such as slapping a restraining Organization of Petroleum Exporting Countries production quota on Baghdad to keep prices at their current level of around $70 per barrel.

But Iran, Iraq's historical rival, whose energy industry has been severely damaged by a lack of investment because of Western sanctions for the last three decades -- as Iraq's were under the late Saddam Hussein -- faces a steady decline as the new sanctions bite.

"The outcome of what is being called 'the great Iraqi oil rush will inevitably transform the balance of power between the oil-producing states with Iraq the winner, Saudi Arabia and Iran the losers," Cockburn noted.

Iran has long coveted Iraq's southern oil fields around the port city of Basra. These contain around two-thirds of Iraq's known reserves and most of the untapped reserves that many believe are there. The south, like Iran itself, is dominated by Shiite Muslims.

These fields also abut Iran's own key oil zone in southwestern Khuzestan province.

And if Iraq is plunged again into sectarian bloodletting between majority Shiites and minority Sunnis, Tehran may feel the time was ripe to grab the Iraqi oil fields -- just as Saddam tried to seize Khuzestan in 1980.

Iran already has immense influence in Iraq through its links with key Shiite organizations. These ties have deepened as U.S. forces withdraw from Iraq.

There are concerns that Tehran will seek to retaliate against the Americans over the sanctions, and U.S. efforts to stifle Iran's region ambitions, by ensuring that pro-Iranian Shiites win the power struggle that has been under way in Iraq since the inconclusive March 7 parliamentary elections.

Recent Iranian incursions into disputed oil fields along the 900-mile border with Iraq, or in "hot pursuit" of Kurdish rebels, are seen as warning shots by Tehran.

As Iraq's electricity crisis deepens, Tehran has stopped supplying Iraq's national grid with 250 megawatts, the electricity ministry in Baghdad said in June.

It remains unclear how far Iran intends to go on this. But one U.S. commentator believes the fix is in.

"Iraq is abandoning the United States in favor of closer ties with Iran," observed Robert Dreyfuss of The Nation.

"The clearest sign of the lack of U.S. influence in Iraq is that oil contracts, once seen as a great prize for the U.S. occupiers of Iraq … have gone not to U.S. firms but to rival firms from China, Russia and other Asian and European companies."

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