Crude Oil : A casualty of the Iraq unrest
Wednesday, 29 May 2013 | 00:00
The wave of violence that has erupted in Iraq following the government’s raid on a Sunni protest camp last month shows no signs of abating and fears are rising that the country is sliding into serious sectarian strife and possibly a return to civil war, Barclays has noted in a geopolitical update.More than 300 people have been killed in a series of bombings and shootings across the country over the past week. Monday was a particularly violent day, with at least 98 people killed in a string of attacks stretching from the northern city of Kirkuk to the southern oil hub of Basra. It was the highest one-day death toll since 2008.
Oil has been a casualty of the unrest, with the 335,000 bpd Kirkuk-Ceyhan pipeline repeatedly bombed and the unstable security environment rendering repairs difficult. On Tuesday, Prime Minister Nouri Al Maliki ordered a shake-up of his security services, in particular with a view to securing the capital. He announced that he would replace several army division commanders and dismiss the head of the Baghdad operations command.
One worrying development is the apparently retaliatory nature of the attacks: Shiites were the main victims of Monday’s violence, but Sunni communities have also been actively targeted in recent weeks. This marks a significant change from the pattern of violence that has characterized the post-civil-war period since 2008.
Sunni extremist groups, such as Al Qaeda, in Iraq have carried out around one major bombing per month since 2008, with Shiites comprising the lion’s share of the casualties. By contrast, the once-formidable Shiite militias have remained largely on the sidelines, with a number of their top leaders opting to join the Maliki government.
However, recent attacks on Sunni places of worship suggest that at least some of these groups have abandoned the policy of restraint, raising the risks of a return to the sectarian bloodletting that set the stage for the 2006-08 civil war.
Another cause for concern is the fact that several prominent Sunni tribal leaders, who had previously called for peaceful protests, are threatening to take up arms unless Maliki agrees to adopt a loose federal system of government, allowing Sunni provinces the same type of utonomy enjoyed by the Kurds.
Although Maliki has displayed a pragmatic streak in the past, he is unlikely, in our view, to bow to demands to devolve power. As a proponent of a strong central government, he has shown a marked tendency to exert tight control over all aspects of the government decision-making process.
In addition, he has gone on the offensive against his adversaries in recent days, publicly accusing Sunni politicians who have expressed support for the protest movement of providing “a cover for the armed groups in order to conduct their criminal acts.”
Moreover, leading Maliki-watchers contend that as someone who had 67 members of his family killed by Saddam Hussein’s henchmen and spent decades in exile, the prime minister believes that projecting strength and avoiding displays of weakness are essential to personal and political survival in Iraq.In the absence of a US security blanket, the longer that the violence and the political stalemate persist, the less likely it is that Maliki will be able to pull his country back from the brink.
Source: Barclays