Top Shiite Cleric Tells Iraq Leaders to Pick New Premier

Iraq’s top Shiite religious leader stepped up pressure on politicians to agree on a new government intended to prevent a fracturing of the country, as the army battles militants who have seized major cities.

Grand Ayatollah Ali al-Sistani, in remarks relayed to worshipers at Friday prayers in the holy city of Karbala, said that picking a prime minister, president and speaker when the legislature meets July 1 will lead to the “desired solution” to the crisis. The Kurdish Regional Government added to calls for Prime Minister Nouri al-Maliki to step aside.

“The assembly should avoid sectarian and nationalistic wrangling as it would only exacerbate the situation in the country,” Sistani said through his representative, Abdul-Mahdi al-Karbalaie. “The Iraqi people are able to overcome this crisis. A breakup isn’t the solution.”

Maliki is facing concerted pressure at home and from world leaders to help forge a unity government that can respond to the demands of Sunnis marginalized by his Shiite-dominated administration. Some of them have supported the militants who overran Mosul and other northern cities this month, threatening a return to civil war and the breakup of OPEC’s No. 2 oil producer.

Kurdish Boycott

Oil futures declined this week as the conflict in Iraq spared the country’s main oil-producing region in the south. Iraqi forces also held the Baiji refinery in the north. Brent for August settlement dropped 1.3 percent this week, the biggest decline since the seven days ended March 21. WTI for August delivery fell 1.4 percent this week.

Kurds will boycott the next government if Maliki stays in office, Falah Mustafa Bakir, head of Kurdish Regional Government’s foreign relations department said, citing KRG President Massoud Barzani. Bakir posted Barzani’s comments on the KRG website after Barzani met with Secretary of State John Kerry.

“If Maliki remains for a third term, there is no need for Kurds to take part in the next government,” Bakir cited Barzani as saying.

U.S. President Barack Obama, while agreeing to send military advisers to help the Iraqi army fight the Islamic State in Iraq and the Levant, has refrained from ordering airstrikes, putting the onus on Iraqi leaders to form a more inclusive government and defeat ISIL. Kerry was in Baghdad this week to urge formation of a broad-based coalition.

Sectarian Divisions

U.S. drones and piloted planes conducting reconnaissance flights over Iraq are now armed, Rear Admiral John Kirby, a Pentagon spokesman, told reporters in Washington yesterday. He said that’s partly to protect the advisers as they arrive in Iraq and venture beyond the fortified walls of the American embassy in Baghdad.

As the Iraqi army is seeking to fight back against ISIL, there are signs that ethnic and sectarian divisions are hardening.

In Baquba, the capital of Diyala province about 55 kilometers (34 miles) north of Baghdad, Shiite militias are patrolling the city, and Sunnis are afraid to leave their homes for fear they’ll be attacked, Basem al-Samarraei, deputy governor of the eastern Diyala province, said by phone late yesterday.

He said security forces were fighting ISIL around the town of Mansouriya, and reports suggest that the government forces were still in control of the oilfields there.

Tikrit Battle

Iraqi troops backed by helicopters stepped up their battle against ISIL insurgents in Tikrit, the hometown of former President Saddam Hussein 95 miles north of Baghdad. Tanks, armored vehicles and 700 additional soldiers are positioned 12 kilometers south of Tikrit in preparation for recapturing the city, which was taken by ISIL soon after it swept into Mosul, al-Mada Press said, citing an unidentified government official from Samarra.

“We’re hearing helicopters hovering above and the thud of mortar rounds landing,” Tikrit resident Khaled al-Samarraei, 45, said by phone, describing bombardments that began around dawn yesterday. Stores are shut, electricity and water have been cut, and his family is living off supplies they had stockpiled, he said.

No Referendum

Further north, in Iraq’s Kurdish-controlled region, Kurdish leader Barzani said that the arrival of his fighters in Kirkuk “can’t be reversed or changed,” signaling an unwillingness to give up a region that’s been disputed between the government in Baghdad and the Kurds.

There’s no longer any need for a referendum on the city’s status, said Barzani, who this week hinted that he may seek independence for the Kurds. Kurdish fighters took over control of Kirkuk, the main northern oil hub, as Iraq’s army withdrew in the face of ISIL’s advance.

Iraq’s parliament is set to convene next week, after April elections in which no political bloc won a majority. The process of forming a government took eight months after the previous vote four years ago.

Maliki has so far refused to step down, even as some of his Shiite allies as well as Sunni and Kurdish leaders have called for his departure. The premier has blamed Sunni monarchies in the Persian Gulf, including Saudi Arabia, for fomenting unrest.

To contact the reporters on this story: Kadhim Ajrash in Baghdad at kajrash@bloomberg.net; Caroline Alexander in London at calexander1@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Dylan Griffiths, Jennifer Joan Lee

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