This paper presents results from the first study that focuses on water resources availability and demand for different purposes in the four oil-rich provinces of southern Iraq. The region accounts for 23% of the surface area and 18% of the country's population, but holds 88% of its oil. A water shortage of 430 Mm3/year for 2010 is estimated for this region where irrigation accounts for 81% of the total water demand. Dhi Qar is the largest agricultural producer and water consumer while Al Basrah and Al Muthanna have the largest water shortages among the four provinces. The interrelationship of energy–water production and utilization is discussed and the annual water balance for irrigation, industrial, domestic and livestock usage in the different provinces determined. On this basis recommendations are made for treating and utilizing the steadily increasing amounts of water produced from the oilfields to supplement the other sustainable water resources in that region.