Iraq May Be the Next Flash Point for Oil Markets
Protests and deadly violence raise the prospect of disruptions to Iraqi oil production that could be particularly painful for the broader market now.
A week of protests in Iraq has left dozens dead and threatened further unrest.
Photographer: Ahmad Al-Rubaye/AFP via Getty Images
It’s now been a week since mass protests sprang up in southern Iraq, sparking unrest that has left dozens dead and continues to flare. What began as spontaneous expressions of discontent over high unemployment, government corruption and Iranian involvement in Iraqi affairs has quickly turned into a movement that could soon have severe consequences for global oil markets. This new danger comes just as supply concerns following last month’s attacks on a key Saudi Arabian facility have begun to die down.
Southern Iraq is home to most of Iraq’s oil industry and the protests have reached the city of Basra, where thousands of people took to the streets last week. The situation there is particularly volatile because that city is responsible for the majority of Iraq’s oil exports. So far, Iraqi security forces have responded to the disturbances with deadly force. Still, the protests, some of which have turned into violent riots, show no signs of abetting. In fact, given the anti-Iranian tenor the protests have taken on, the situation could get worse before it gets better as millions of Iranians prepare for an annual religious pilgrimage to Karbala, a city in southern Iraq.