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‘Crude for blood’ – return of sectarian war hits Iraq’s oil exports

‘Crude for blood’ – return of sectarian war hits Iraq’s oil exports thumbnail

Iraq’s Sunni insurgents are targeting its main northern oil pipeline, undoing plans for a massive increase in exports as violence reaches levels unseen since the darkest days of civil war.

Iraq’s ambitious plans to ramp up its oil output have been held back by poor maintenance and technical problems. Violence is making the situation worse, and, if it continues to escalate, could have a measurable impact on global supply.

Death tolls for the past three months in Iraq have been the highest for five years, since the days when rival Sunni and Shi’ite militias fought for control of neighborhoods and battled 170,000 U.S. troops.

Today, the Americans are long since gone, but sectarian animosity has re-emerged, fuelled by resentment among Sunni Muslims at what they perceive as domination by Prime Minister Nouri al-Maliki’s Shi’ite majority.

This week insurgents staged possibly their boldest attack in years, freeing hundreds of prisoners in coordinated strikes on two jails that killed dozens of troops.

That tactical sophistication is also being turned against Iraq’s oil exports, hurting plans to turn the country into the world’s biggest new source of traded oil and raise the money to rebuild after decades of sanctions and war.

“It is government crude for Sunni blood,” said Abu Ammar, a Sunni tribal leader in southern Nineveh province, where a stretch of the main Kirkuk oil pipeline has repeatedly come under insurgent attack.

“The Baghdad government should understand this message: stop spilling our blood and we’ll stop attacking the oil pipeline,” he told Reuters.

“The Shi’ite government is killing and persecuting Sunnis in all parts of Iraq. As revenge we have to make the government suffer, and the best way is to keep blowing up the oil pipeline.”

According to oil shipping figures tracked by Reuters, Iraq’s oil exports have fallen this month to just 2.27 million barrels a day, a fifth below the government’s target of 2.9 million bpd this year.

Iraq has ambitious plans to increase oil exports as high as 6 million bpd after decades when production was held back by sanctions and war. Its exports reached 2.62 million bpd last November, the highest level in decades, but progress has since been reversed.


The total has been kept down in part by technical problems that have little to do with security, especially in Basra, the southern port where few Sunnis live.

An official at the South Oil Company said on Thursday Iraq will have to cut its exports in Basra by 400,000-500,000 barrels per day in September for maintenance.

But one of the main reasons for the fall is the damage inflicted by insurgents to the Kirkuk pipeline, constructed in the 1970s to bring 1.6 million barrels of oil per day to the Turkish Mediterranean port of Ceyhan.

A bomb attack on June 21 kept the pipeline closed for much of July. A repair crew sent to fix the damage was ambushed by gunmen who killed two engineers and two police.

In the end, Kirkuk oil shipments for this month averaged just 150,000 bpd, less than a tenth of official capacity.

“Bomb attacks and leakages due to corrosion have made the pipeline unfit to handle steady shipments from northern oilfields,” a senior official with Iraq’s state-run North Oil Company told Reuters.

“The deterioration of security in areas where the line stretches has made it impossible for our crews to repair damage in time as we used to. Now it takes ages,” said the official.

“In recent meetings we told the oil ministry that Kirkuk’s major export pipeline is now suitable for watering gardens and not for carrying oil.”

BACK TO 2007

A former official in Iraq’s oil industry said the incidents were familiar from the dark days of Iraq’s sectarian civil war.

“It seems like we are going back to the 2006-2007 environment where the pipeline was halted for months on end,” the former official said. “The attacks are deliberate: the aim is to stop Kirkuk from flowing.”

Although sources differ on the precise numbers of casualties, at least 2,500 people have been killed in Iraq in the past three months, mostly by bombings that target security forces, worshippers in mosques and ordinary people.

According to U.N. figures, the death toll for the month of May surged above 1,000 for the first time since mid-2008, when U.S. and Iraqi troops launched an offensive to recapture swathes of territory still in the grip of warring sectarian militias.

The last five years saw a gradual decline in violence in Iraq. U.S. forces pulled out at the end of 2011. Iraq touted plans to ramp up its oil production and earn funds for reconstruction. Last year its output surged.

But Maliki’s Shi’ite-led government never managed to win over the support of Sunnis, the minority that ruled under Saddam. A fragile political system has come close to unraveling this year, with Sunnis staging mass demonstrations against the government, accusing it of marginalizing them.

Civil war in neighboring Syria along the same sectarian lines as in Iraq has emboldened Sunni militants, including Iraq’s branch of al Qaeda, which merged with a powerful Syrian rebel force. The combined group claimed responsibility for this week’s Iraq prison attack.

“The prospects of a descent into civil war along the lines of the violence that dominated Iraq in 2006-07 are very real,” wrote security consultancy Eurasia Group in a research note two weeks ago.

That note still said the deployment of government forces in Sunni provinces would probably be sufficient to prevent Sunni insurgents from developing “forces that can engage government units directly”. But Monday’s subsequent attack on the prisons suggests the assessment may be optimistic.

Suicide bombers drove cars packed with explosives to the gates of Abu Ghraib prison on the outskirts of Baghdad on Sunday night and blasted their way in, while gunmen attacked guards with mortars and rocket-propelled grenades. Other militants took up positions on a highway and fought off troop reinforcements.

A similar attack was staged simultaneously at another prison north of the capital. The two attacks killed at least 26 soldiers. Some 500 prisoners, mainly Sunni militants, escaped.

“The situation is definitely deteriorating and we’re seeing attacks on a scale we haven’t seen since late 2007,” said John Drake, an Iraq analyst at AKE, a consultancy that advises oil companies and other firms with exposure to Iraq.

“If they can successfully attack a prison, it’s going to be important to keep other essential facilities – including oil facilities – safe.”


7 Comments on "‘Crude for blood’ – return of sectarian war hits Iraq’s oil exports"

  1. Arthur on Thu, 25th Jul 2013 10:45 pm 

    Iraq is a country that only exists because it existed yesterday. That’s the only reason and that is not a very good reason. So, the country will fall apart, the first in a long list in that troubled region.

  2. Plantagenet on Thu, 25th Jul 2013 11:35 pm 

    Obama still can’t decide what to do in Afghanistan. It isn’t fair to confuse him with more problems in Syria and Iraq and Egypt.

  3. BillT on Fri, 26th Jul 2013 12:39 am 

    Obama does NOT decide what happens anywhere, except in his own home, maybe.
    Those decisions are ALL made by your unseen masters. And they own Reuters and 90% of the other ‘news’ sources in the US. You hear and read only what they want you to hear and read. That is why they are trying to control the internet.

    There has been a bit of Us blood in every gallon of gasoline in the Us for many years.

  4. GregT on Fri, 26th Jul 2013 1:14 am 

    If anyone has any interest in who is really in control, the following is a must watch.

  5. DC on Fri, 26th Jul 2013 6:41 am 

    What ‘civil war’? The only civil war in Iraq was the one the US engineered to cover up the fact the Iraqis were resisting US imperialism.

    If you guys havent seen this, its a must-see.

  6. Arthur on Fri, 26th Jul 2013 8:47 am 

    “The only civil war in Iraq was the one the US engineered to cover up the fact the Iraqis were resisting US imperialism.”

    That’s absolutely not true. Saddam’s government was a ruthless tyranny, based on the rule of the Sunni 18% or so minority. During Saddam’s reign there were several uprisings by the Shi’its in the south and Kurds in the north, but these were surpressed the hard way, including gassings of hundreds of Kurds.

    Imagine relatively tame individualistic Christian Canadian Anglophone and Francophone ethnics and multiply that by a factor of ten to get an idea of the intensity of ethnic-religeous rivalry in Iraq. Hundreds of thousands got killed, not by the Americans, but mostly by inter-ethnic violence. Think chainsaws in basements, that kind of horrors. In the end, the Shi’ite majority cleverly used the US invasion to get rid of Saddam and Sunni rule. Most (IED) assaults against US troops were carried out by the Sunnis, who resented the loss of their power.

    The intent of the US was to introduce democracy, human rights, women’s rights, rule of law and a few goodies more, which was not all that dishonorable, apart of course from the desire to add oil rich Iraq as another satellite to the US empire, just like Saudi-Arabia, and score major geopolitical points in the battle against Russia and China for global supremacy.

    The gross US miscalculation was that you can’t introduce these essentially western values in a hyper-tribal archaic society like Iraq. In these societies democracy will lead to the victory of the largest tribe and that is what happened. And oh irony, the US invasion benefitted only one idle bystander and that was Iran. The invasion was not one own goal, it was ten own goals. Once that blunder was committed, the geopolitical map of the ME had changed and strategists in Teheran had noticed that now a Shi’ite corridor had been created from Iran al the way to the Meditarenean and prompt the socalled ‘Islamic pipeline’ between Pars gasfield and Lebanon.

    Teheran even suggested that the pipeline could serve as an alternative for the US backed Nabucco According to Engdahl, and I tend to agree with him, the instigation of the ‘civil war’ (rather war between Assad government troops and foreign jihadist mercenaries) in Syria has everything to do with preventing this pipeline from happening.

  7. BillT on Fri, 26th Jul 2013 10:24 am 

    Saddam killed to keep order. The Us (and NATO) killed Iraqis to keep Saddam from selling gold for other than US Dollars and to gain control of the oil there. Not to mention the billions and maybe trillions in profits for the MIC. All else is coverup BS and propaganda to pursue the real goals of world domination.

    NATO is soon going to be dragged into the Asian Pivot and start dying there also. NATO is an Imperial Puppet. More weapons sold and more profits for the MIC paid for by Western Blood.

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