Battle for Basra jacks up global oil prices

Bill Weinberg

The latest escalation in the ongoing struggle for Basra is affecting global oil prices. As news broke that one of Iraq’s main oil export pipelines from Basra exploded, cutting at least a third of the exports from the city that provides 80% of the government’s revenue, oil prices jumped more than $1 a barrel, Reuters reported. Jamal Hamed al-Fraih, spokesman for the South Oil Company, said the stricken pipeline was feeding crude to one of the main refineries in the province, at Shuaiba—for internal consumption. “Oil exports are still flowing but they are less than a few days ago,” he said adding that oil exports from Basra, Iraq’s main outlet, had been averaging 1.5 million barrels a day before the new outbreak of fighting. Prices leveled off after his clarification.

Moqtada al-Sadr’s forces are refusing to back down in their fight for control of Basra, and his fighters in Baghdad took to the streets in a show of force, calling for the resignation of Prime Minister Nouri al-Maliki. The clock continues to tick on Maliki’s 72-hour ultimatum for Sadr’s Mahdi Army to lay down arms in Basra or face all-out assault. (CSM, March 27)

The initial news of the pipeline blast sent prices above $106 a barrel. Overall Iraqi oil exports have only recently returned to levels comparable to those before the US-led invasion. (Daily Star, Lebanon, March 27)

See our last posts on Iraq, the struggle for Iraq’s oil and the struggle for global oil.

  1. Sadr forces boast of new anti-aircraft rockets
    From the London Times, March 30:

    Ragtag members of the Mahdi Army, a heavily armed militia loyal to Moqtada al-Sadr, the radical Shi’ite cleric with close links to Iran, vowed to fight to the death to prevent Maliki from imposing government control on the southern port at the heart of Iraq’s potentially hugely profitable oil industry.

    “We have received a shipment of Strela antiaircraft rockets,” Abu Sajad boasted to a Sunday Times reporter.

    “We intend to use them to prove to the world that the Mahdi Army will not allow Basra to be turned into a second Falluja [the former centre of anticoalition resistance that was crushed by US-led assaults].” President George W Bush praised Maliki and described the clashes as a “defining moment” for the Baghdad government’s attempts to curb Sadr’s influence and assert its own authority. But despite Bush’s approval, American officials are concerned that Maliki’s military gamble may cause serious embarrassment for the coalition forces.

    US officials said the Iraqi prime minister had launched the assault on Tuesday without consulting Washington, but yesterday it was the Americans under fire again after claims that eight civilians had been killed in a US bombing raid.

    The SAS was in Basra alongside Iraqi commanders, calling in attacks from RAF and US aircraft on “enemy combatants” as the death toll from five days of fighting across Iraq rose above 300, with hundreds wounded.

    British artillery units destroyed a militia mortar position in support of Iraqi forces yesterday, a spokesman said. The mortar, in the al-Hala district of northern Basra, was positively identified by the British before they opened fire from their base at Basra international airport.

    Basra’s hospitals filled with civilian casualties and the violence continued to spread through other cities, including the suburbs of Baghdad.

    So where do you suppose they got those Strela anti-aircraft from?