ISIL Insurgents Capture Largest Iraq Oil Refinery

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June 18 (Bloomberg) -- In today’s “Global Outlook,” Abhishek Deshpande, oil markets analyst at Natixis, discusses the capture of Iraq’s largest oil refinery by ISIL insurgents and how it impacts oil production in Iraq and the global oil market. He speaks on Bloomberg Television’s “The Pulse.”

Like it has fallen or is at least on fire.

What are the implications of that?

It clearly shows that isis is expanding its presence.

This particular refinery supplies baghdad in general.

It is likely to have an impact on the economy.

This is one of the largest refineries in iraq.

We keep hearing that we haven't seen a bigger spike in oil prices because the bulk of oil production infrastructure is in the south of the country.

Is that safe?

You can question that as well.

The situation seems to be getting worse day by day.

Yes, the bulk of production is coming from south of iraq that the question is, if isis takes over that, the question of oil supply security in south of iraq goes flying out of the window.

It is a question of having security over oil.

The big oil companies are removing nonessential personnel from their facilities in the south of iraq.

To what extent does that degrade those facilities?

Oil companies are going to take precautionary measures to make sure their staff is safe.

In terms of degrading the facility itself -- the ability to produce.

Are we going to see lower output?

What we are seeing now is an increase from the south.

That is basically because krg in particular is going to have leverage over baghdad.

That is probably going to compromise the exports.

The south of iraq is shia dominated, a safer region for now.

It is able to export because of the south terminal.

We would potentially see them in the near term, you could see some increase in exports with oil companies trying to export as much as possible.

So they are putting their foot on the pedal.

Talk to us a little bit more about kurdistan.

Clearly they are gaining some autonomy here amongst the chaos.

Even before this got going, they had started to export oil from turkey, right?

How much actual capacity do they have to pick up the slack if we lose production in the south?

If we lose production from the south, that is a major damage to the oil market.

The south produces 90% of iraq's total oil.

The restrictions were because of baghdad.

They were unable to compromise on what should be given to krg.

It could potentially rise for krg because they have that potential to increase it.

Now even kurdish regions have taken over krkirkuk which could increase the output.

It was a part of the northern iraq region and not the krg region.

That does not replace the bulk of oil that comes out of the south of the area.

Do i need to start rethinking my assumptions on what iran is going to be delivering over the next few years?

Iran could come out of this as one of the big winners.

I think you are right.

The p5 plus one meeting is going on right now.

I think iran has an upper hand here.

As you can see from the western governments reopening their embassies in iran, they are losing what they initially had.

Iran could see a significant role in maintaining stability in the region as iran understands the crisis.

It does not itself want any stability -- instability reaching its own country.

Iran could play a strong role and the west knows that.

This might have to take a step back.

We could see a breakthrough in iranian nuclear sooner than we were expecting.

Ok.

then you very much indeed.

Still to come, cutting your carbon footprint.

We are going to be live with the ceo of carbon culture to get tips on slashing your energy use.

?

This text has been automatically generated. It may not be 100% accurate.

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