Oil chokepoint politics in Iraq

Oil infrastructure is long, linear, and fragile as hell. A single attack against a key node in the distribution and production system can knock the system out. We have seen that repeatedly in the mixed Sunni-Kurdish areas as the Sunni insurgents have knocked out the ability to export oil from Kirkuk and oil fields deeper in Kurdistan through an effective sabotage campaign against pipelines, junctions and bridges.

These chokepoints allow for groups that either control the chokepoint or can legitimately threaten to seize usage control over the chokepoint an immense amount of veto power. The Sunni insurgency has an economic stranglehold on Kurdistan — they can keep them from exporting hard currency producing oil for a very cheap expenditure of men and munitions. This greatly reduces Kurdish option space, while also reducing the central government’s option space as it is cut off from funds it needs. The US instead picks up the tab driving down the willingness and ability to stay.

There is another chokepoint in the country that so far has not been squeezed. And that is Basra. There have been a couple of attacks, including one double boat suicide attack, against the southern oil export infrastructure, but on the whole, the southern infrastructure has been maintained in comparatively decent shape.

However that might be changing. Fadillah, a Shi’ite Islamic party that follows Moqtada Sadr’s father, but has split from the current group of Sadrists in Parliament hold a strong political position within Basra. It is the dominant group there, beating out SCIRI and DAWA for control of the government. It is also a fairly localized group, with little national representation.

In order to improve its political position, Fadilah is threatening a work slowdown so that Iraq’s southern fields and refineries only produce enough fuel to supply internal demand. This would take 1.2-1.5 million barrels of crude off the global market per day, leading to another $8-$10/barrel price increase if they follow through with this threat. If they follow through with the threat, the Baghdad government is broke within weeks. Fadilah has a short term veto position and leverage and it could cause permanent havoc if it decided to use it.

Military options to seize control of the infrastructure against Fadilah workers suck because the Sunni Arab insurgency has demonstrated how easy it is to knock out a system if the system engineers are telling the explosive placement teams where to attack for maximum effect. Never mind the specter of Iraqi Army units going house to house in Basra, as it would be a further incitement to civil war if those units were Sunni Arab or Kurdish units, and primary loyalties of the Shi’ite units are not towards the Baghdad central government.

One Response to “Oil chokepoint politics in Iraq”

  1. Kurdistan and Politics of Oil Resources

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