Iraq: oil sector crisis deepens, ethnic cleansing continues

Iraq’s largest oil refinery has been shut down following death threats to tanker drivers. The threats followed a steep government-ordered rise in the price of petrol earlier this month. The oil ministry said the shutdown at the Baiji refinery was costing $20 million a day. Fears of severe shortages have led to long lines at petrol stations in Baghdad.

The ministry said it hoped the refinery, which has been out of action since the weekend, would be back up and running within days. Although billions of dollars have been spent on infrastructure since Saddam Hussein’s regime was toppled, fuel and electricity production have not reached the levels maintained before the 2003 invasion of Iraq. (BBC, Dec. 30)

Oil Minister Ibrahim Bahr al-Uloum has been temporarily released from his post amid a dispute over the government’s petrol pricing policy. Bahr al-Uloum had publicly objected to the Iraqi government’s decision this month to raise petrol prices threefold. He is to be replaced for 30 days by none other than Deputy Prime Minister Ahmed Chalabi.

A ministry spokesman told reporters that “production in the north, centre and south is about to suffocate.”

Bahr al-Uloum, the eldest son of independent Shia cleric Mohammed Bahr al-Uloum, is a petroleum engineer who previously served as oil minister in the first post-war interim administration between September 2003 and June 2004.

“I object to the decision of putting me on leave and the mechanism by which it was done after I objected to the government’s decision to raise fuel prices,” Bahr al-Uloum told reporters.

The Iraqi government cut subsidies on petrol earlier this month shortly before the International Monetary Fund (IMF) backed a new $685m loan to aid its economic reconstruction. Protests broke out throughout the country as the price of petrol tripled from 50 to 150 dinars ($0.03 to $0.10) a litre.

Although billions of dollars have been spent on infrastructure since Saddam Hussein’s regime was toppled, fuel and electricity production have not reached pre-invasion levels. (BBC, Dec. 30)

Meanwhile, at least 12 Shi’ites were killed by insurgents Dec. 29 after apparently failing to heed warnings that they should move out of their homes in the mainly Sunni town of Latifiya, about 20 miles south of Baghdad, officials said. The victims were reported to be members of the same extended family.

“A number of gunmen broke into three houses in Latifiya at dawn on Thursday, took 12 males aged between 20 to 40 and put them into a minivan owned by one of the victims, and machine-gunned them,” Iraqi Army Capt. Ibrahim Abdullah told Associated Press. AFP said 14 people were killed, some of them women. Reuters said the killings took place inside a house, where intruders slit the throats of 11 men and women.

Also Dec. 29, a suicide bomber killed four police officers and wounded five at a checkpoint near the interior ministry in Baghdad, officials said.

Meanwhile, a web statement attributed to “al-Qaeda in Iraq” said it was holding five Sudanese hostages. The group said it had “arrested five employees of the Sudanese embassy in Baghdad, including diplomats” and that the Sudanese government had “48 hours to clearly announce it is breaking off diplomatic relations with the [Iraqi] government… Otherwise the government must assume responsibility for sacrificing its diplomats.” (BBC, Dec. 30)

See our last post on Iraq, and other ripples from the global oil shock.