Albertus J Meintjes

Albertus J Meintjes

Associate Analyst

31/08/2018

31/08/2018

Iraq Strikes and their Threat to the Oil and Gas Industry

Iraq has seen major protests throughout its governorates since mid-July. While civil unrest has been seen in areas such as Maysan, the majority of unrest has been centred in Baghdad and Basra, with Basra containing the majority of demonstrations. The demonstrators have taken to the streets protesting a lack of service delivery, with the electrical grid being the main concern, as well as the lack of job availability in the oil sector.

While demonstrators have for the most part staged their protests near government buildings and public areas, there have been incidents of demonstrations taking place at oil fields, such as the Qurna oil fields in the Basra governorate. While there has been no property destruction as yet, or threat to oil companies, a lack of action will likely see escalation.

The Iraqi government has been heavy handed in its handling of the protests. Fatalities and mass arrests have been reported, although a steadier hand has been noted following international condemnation. The Iraqi government halted moves to form a coalition government, until the protestors demands have been fulfilled.

Most recently, the Iraqi Minister of Energy has been sacked, although this is likely no more than a move to appease the masses. The electrical grid is strained, old and damaged. Years of war have placed little funding on infrastructure. Kuwait has donated generators, and Saudi has offered to export energy, at a far cheaper price than Iran does currently. Gulf states likely fear that unrest will result in support for Iranian influences in the region. 

 A snapshot of significant security incidents and threats to the oil industry in Iraq during July 2018

Snapshot: Significant Security Related Incidents in Iraq July 2018

Daesh militants have not sat idly by. Despite their diminished force strength, they have recently taken to targeting infrastructure, as seen on the 29th of July at a power station in Kirkuk. Such action will likely only exacerbate civil unrest. However, Daesh forces have not targeted oil infrastructure, and likely lack the strength in Iraq to mount any effective attack beyond sabotage at poorly defended sites, and acts of terrorism.

 

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