Top Energy Stories

Iraq is suffering from a severe electricity crisis. Iran has drastically cut gas and electricity exports to Iraq, contributing to power shortages across the country that prompted the resignation this week of Iraqi Electricity Minister Majid Mahdi Hantoush. The electricty failures were even worse on Friday, as Iraq's grid was delivering just over 4,000 megawatts, less than one-fourth of regular capacity and far below demand. An Electrictiy Ministry official told Samya Kullab of AP that the cause of the outage was not immediately known, and could be due to an overloaded system of sabotage. The outages highlight Iraq's need to build up its own gas and electricity capacity and diversify its energy imports in order to meet the country's rapidly growing demand — read more on Iraq Oil Report.

Iraq’s top tax authority has ordered government departments to stop issuing visas and halt imports for nearly two dozen international energy companies whom it accuses of late tax payments. If enforced, the orders, dated June 27, 2021, could prevent some of the biggest players in Iraq’s oil, gas, and electricity sectors from bringing staff and equipment into Iraq, effectively depriving the country of work that is needed to meet its own production targets at a time when insufficient gas feedstock is contributing to the nationwide electricity failures. Read the full story on Iraq Oil Report.

The director of Iraq's state-run South Gas Company (SGC) says his goal is to process all of the associated gas that is generated as a byproduct of crude production at Basra oil fields, much of which is currently burned in a wasteful practice known as flaring. In an interview with Iraq Oil Report, SGC Director General Hamza Abdul-Baqi Nassir said negotiations have reached an advanced stage with French firm Total over the development of the Ratawi gas hub as part of a multi-faceted Heads of Agreement signed in April. He also discussed the status of a new phase of work for the Basra Gas Company, which is pushing toward a goal of doubling its gas capture and processing. Read the full interview on Iraq Oil Report.

Iraq’s monthly oil revenues topped $6 billion for the first time since January 2020. Higher global oil prices boosted federal revenues from oil sales in June, even though exports averaged just 3.318 million barrels per day (bpd), marginally below May exports of 3.336 million bpd. Read the full story on Iraq Oil Report.

National News

The U.S. carried out airstrikes in Iraq and Syria on June 28 against two Iran-backed armed groups, Kataib Hezbollah and Kataib Sayyid Shuhada, according to Eric Schmitt of the New York Times. The U.S. Defense Department said the groups had conducted drone strikes against American personnel in Iraq in recent weeks. There were no initial reports of casualties. This is the second time U.S. President Joe Biden has ordered strikes in the region, following February strikes against buildings the Pentagon said belonged to Iran-backed groups responsible for attacks against U.S. and allied personnel in Iraq.

On June 26, explosive-laden drones hit Bragh village, northeast of Erbil, causing material damage but no casualties. The attack happened a few kilometres from the site of the new U.S. consulate which is currently under construction, according to Rudaw. Following the incident, Kurdistan Regional Government (KRG) Prime Minister Masrur Barzani said such attacks “call the Iraqi government’s power and credibility into question.” Barzani thanked those who had condemned the attack on Erbil, but said that this is not enough and that the “act of aggression” needed a more forceful response. The previous such attack happened on April 14 when the U.S. base at Erbil airport was targeted with an explosive-laden drone. Iran-backed armed groups have launched numerous attacks on U.S. interests across Iraq in recent years.

Thousands of paramilitary fighters, including Iran-backed factions, staged a military parade at a base in Diyala on Saturday June 26, “showcasing tanks and rocket launchers in their biggest formal parade to date,” according to Reuters. The event was attending by Iraqi Prime Minister Mustafa al-Kadhimi, and marked the seventh anniversary of the formation of the Iraqi government's al-Hashid al-Shabi (Popular Mobilization) paramilitary organization. According to Reuters: “Kadhimi watched, flanked by militia commanders while hundreds of armoured vehicles drove past a banner of the late [Hashid] military chief Abu Mahdi al-Muhandis, an Iran-backed commander who was killed in a U.S. drone strike last year.”

Baghdad hosted a security, military, and intelligence summit with Jordan and Egypt on June 27, according to Rudaw English. Kadhimi and Iraqi President Barham Salih met President of Egypt Abdel Fatteh al-Sisi and King Abdullah II of Jordan in Baghdad. Following the meeting, the leaders vowed to strengthen gas and electricity transmission between each other, “with Iraqi oil to be exported to Egypt and Jordan through the Arab Gas Line and a crude oil line linking Basra to the Jordanian city of Aqaba,” according to the report. Such initiatives have been discussed for years but the sides have not signed binding contracts or secured financing for the projects. The leaders agreed to facilitate travel between Baghdad, Cairo, and Amman, as well as cooperating further in the field of agriculture.

The Iraqi government appears increasingly weak in the face of militias and parties that will probably entrench their power in upcoming elections, according to Amina Ismail of Reuters. Ismail writes that the government of Iraq has painted an early vote in October as “the answer to Iraq’s woes,” but that a series of recent events have underscored the impunity enjoyed by Iran-aligned paramilitary groups: “Iraq's biggest parties — all linked to armed groups — are already positioning themselves to divide up election spoils while pro-reform activists are gunned down in the streets."

Baghdad's criminal court of Russafa sentenced nine people to death for their participation in the Camp Speicher massacre, writes Sura Ali of Rudaw. The men apparently confessed to their participation in the execution of 1,700 Air Force cadets in 2014, said the Supreme Judicial Council. The council said in a statement that “the court found sufficient evidence to sentence those convicted in accordance with the provisions of Article 4 of the Anti-Terrorism Law No. 13 of 2005.” On June 12, a UN team investigating crimes by the self-proclaimed Islamic State (IS) militant group said it had found clear evidence that the massacre “constituted a number of war crimes under international law.” Iraq has already sentenced to death more than 50 people accused of taking part in the massacre; 36 of them were hanged in August 2016, according to Ali.

Comment and Analysis

Donald Rumsfeld has died. To mark the occasion, Rasha al-Aqeedi looks back at the 2003 U.S. invasion of Iraq, bringing to life the chaos that followed the “shock and awe” campaign from her perspective as a young person in Mosul. She describes then- Defense Secretary Rumsfed’s callous attitude as symptomatic of continuing U.S. indifference to the reality on the ground in Iraq: “The nation of Iraq was invisible to Mr. Rumsfeld, therefore it was unworthy of restoring. As my country shed rivers of blood, he showed no contrition." She also writes about how Rumsfeld’s failures in Iraq changed the calculus of American interventions abroad: “The failure to stabilize Iraq while losing thousands of American lives shifted the U.S. domestic discourse forever… for many of us still hoping for a better Iraq, he is irrelevant. Just as his death is now.”

The case for participating in upcoming elections. In a post for the LSE’s Middle East blog, civil servant and Iraq watcher Local Observer makes the case for participating in October’s parliamentary elections, even as some parties and anti-government activist call for a boycott. She writes that “despite the difficult political climate, there should be widespread participation in the upcoming elections. This is the only way to avoid the further entrenchment of Sadrists and pro-Iranian loyalist forces in parliament at the expense of gradual long-term reform.” Even though promises made to protesters have not been kept, the author writes that boycotting elections would only “work to further diminish the already small number of pro-reform voices, while at the same time strengthening the grip of Sadrists and loyalist candidates”. The author advocates for voting for the “least corrupt, best of the worst” candidates “who might be rotten but whose blocs do not have armed wings in the form of rogue militias and whose loyalty doesn’t lie with the country’s overbearing neighbours.”

Iran-backed groups are increasingly targeting activists for assassination. For the Washington Institute’s Fika Forum, Ali Al-Mikdam writes that many activists believe that Iran’s focus on assassinating activists has increased substantially since the U.S. assassination of Iranian General Qassim Soleimani in January 2020. According to Mikdam, citing the AP, Soleimani met with a group of senior security officials in Baghdad in October 2019 and told them: “we in Iran know how to deal with protests.” Mikdam writes that following this meeting, Iran-backed Iraqi militia “began actively targeting protests and activists playing a leading role in organizing and publicizing them.” According to the author, Iran has been unable to retaliate against the U.S. using equal force, following a series of U.S. strikes, and has so turned to “hunting down Iraq’s vulnerable activist class.” Mikdam writes that in the three months before Solemani was killed, only five activists were assassinated, but this figure jumped to 11 attempts in the months following his assassination.

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