In an article published yesterday by the Brookings Institute which is replete with misleading characterizations of the current Iraq conflict as being a sectarian one between Sunni militants, o the one hand, and what the author ridiculously refers to as Malikis now more homogeneously Shia Iraq Army and the Shi’a coalition forces, one the other, Dink Tank denizen Kenneth M. Pollack opines: [A]ny significant disruption of current Iraqi oil production or long-term diminution in its expected growth could have major repercussions for the U.S. economy. As former Federal Reserve Chairman Alan Greenspan pointed out back in 2002, “. . . all economic downturns in the United States since 1973, when oil became a prominent cost factor in business, have been preceded by sharp increases in the price of oil.” Greenspan’s observation came before the 2007-2009 “Great Recession,” which was also preceded by a tripling of oil prices. The vast majority of Iraq’s oil production comes from southern Iraq, and primarily from fields far from the current frontlines. It is nearly 200 miles from Muqdadiyah—which is as far as the southward Sunni militant advance has so far gotten—to the northernmost of Iraq’s major southern oilfields. It is 220 miles from Fallujah—which is as far as the eastward Sunni militant offensive has gotten—to those same fields.We should always remember that war is highly unpredictable, and it is exceptionally difficult to assess a dynamic balance of combat forces with such limited information. Nevertheless, the evidence we have suggests that it is more likely that the Iraqi civil war will settle into a vicious stalemate roughly along current lines for the foreseeable future than it is that the Sunni militant fighters will be able to swiftly overrun Baghdad and drive south into Iraq’s main oil fields. If this most likely scenario is borne out, it would mean that there would be relatively little near-term impact on Iraqi oil production. Iraq’s oil exports come overwhelmingly from these southern fields and they flow southward, to the Persian Gulf, where they are exported from terminals at the southernmost tip of Iraq (indeed, from offshore).
Posted on: Wed, 25 Jun 2014 02:22:53 +0000
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