Cascading Systems Dispruption Part 2

I was wrong. Last week in a post talking about the current insurgent anti-refined petroleum products campaign, I had mentioned that the Turkish government had threatened to cut off future supplies of refined petroleum to the Iraqi government due to the Iraqi government being behind on its bills. I had said “I fully expect that these payments will come through this time as the US still has some slush fund money available in the reconstruction budget.”

I was wrong. The Turkish government has cut shipments of refined petroleum products to Iraq because they are still waiting for the check to come in for previous purchases. These past due debts total over $1 billion dollars, and the Iraqi government has promised to pay them by February 5th. However, supplies will not flow until the cash arrives again.

This will have a couple of side effects. First, the already high gasoline, diesel, and cooking fuel prices in the major urban areas will continue to increase provoking even more dissatisfaction with the ability of anyone claiming governing authority to “do anything right.” Secondly, the insurgents who are maintaining effective control over Bajii, home of the largest refinery in Iraq, should be making a bloody fortune on selling black market gasoline thus funding their own efforts, denying funds to the government and contributing to the continued delegimitization of the state. Finally, this gives the other suppliers to Iraq a little more leverage on internal policies, for who knows when there is a need for distribution system “maitenance” and wouldn’t that suck if there is a surprise this week. One of these suppliers is Iran, and if the US government is intending to go hardline on Iran, it is a really dumb idea to increase their counterleverage capabilities.

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