Iraq now finds itself in a period of uncertainty and transition after more than three decades of Ba'ath party rule. Following the end of Saddam Hussein's rule in the spring of 2003, Iraq was governed for a year by the "Coalition Provisional Authority (CPA)" led by the United States and the United Kingdom. On June 28, 2004, the CPA transferred power to a sovereign Iraqi interim government, with national elections held on January 30, 2005. On May 3, 2005, the new transitional government was sworn in, with Ibrahim Jaafari as Prime Minister.

A constitutional referendum was held in October 2005, with the constitution being approved overwhelmingly. Elections for a permanent government were held in mid-December 2005. The constitution (articles 108-111) addressed the control and distribution of Oil resources in general terms, but many details (e.g., exactly how oil revenues will be distributed) were not spelled out exactly. Another question that remains outstanding is whether or not Iraq will form a new Iraqi National Oil Company (INOC).

Although Iraq's unemployment rate remains high (27-40 percent), the overall Iraqi economy appears to be recovering after more than a decade of economic stagnation, sanctions, and war. However, it is important to note that estimates of economic growth vary widely. For instance, Iraqi real GDP growth is estimated by Global Insight at 34 percent growth for 2005 and 22 percent for 2006.
 
In contrast, the International Monetary Fund (IMF) recently lowered its Iraq GDP growth forecast to just 3.7 percent, citing “the continuing sabotage of oil installations,” with forecast growth of 17 percent for 2006.