Iraq vaulted to second place this year among the largest oil producers in the Organization of Petroleum Exporting Countries (OPEC), and is poised to ramp up its already robust output even further. But the country’s severe water scarcity could be the Achilles’ heel of its oil production.

According to the International Energy Agency’s (IEA) new World Energy Outlook, which was released Monday, “the [global] energy sector’s water needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects.” (See related story: “U.S. to Overtake Saudi Arabia, Russia as World’s Top Energy Producer“)

An October report from the IEA stressed that oil output in Iraq, which is now at