Iraq: A Ticking Time Bomb for Oil Markets | WHAT REALLY HAPPENED

Iraq: A Ticking Time Bomb for Oil Markets

At the same time that a new Iraqi government is forming, a government that is increasing Iranian influence within Iraq, another election is threatening the country’s stability.

On Sunday, Kurdistan is voting for a new KRG parliament, a vote that may result in new power brokers in Erbil. The Kurdish elections are hugely significant for the region, as they not only decide who is going to be put forward as the potential president of Iraq, but also reshape the KRG as an entity and its relations not only with Baghdad, but also with Iran and Turkey. A further destabilization of Iraq would be an outcome that most regional players aim to avoid, with the war in Syria and the imminent Iranian sanctions already causing uncertainty.

Oil and gas analysts have been keenly watching OPEC’s efforts to find a solution for its production and export problems, with the Iranian sanctions looming. Due to this supra-regional development, not a lot of attention has been given to the ongoing clashes within Iraq, a leading member of OPEC.

Optimistic statements made by Iraqi oil officials have normally been taken with a grain of salt, but now it seems that the media accepting the narrative without question. While protests in the Basra Province have been well covered, almost no attention has been given to the dramatic shifts going on in Baghdad. After a short period of anti-Iranian political rhetoric and even a highly publicized visit to Saudi Arabia, Muqtada Al Sadr, the leader of the strongest Iraqi Shi’ite party, seems to have done an about turn politically. This is important because the outcome of the current Iraqi power struggle will have an effect in the coming months on the possible revamp or expansion of the oil production capacity. With this in mind, the Kurdish election become increasingly important.

Webmaster's Commentary: 

When US sanctions start to bite, as of 4 November, the last day President Trump has decreed by which foreign governments can buy Iranian oil, look for oil prices to skyrocket internationally, particularly if the Iraqi oil infrastructure cannot be fixed before then.