Top Energy Stories

Production has started again at Gharraf. The oil field had shut down in March when the operator, Petronas, withdrew workers back to Malaysia before its pandemic-related border closures. Now those expat workers are returning and production is back online, with an initial target of 50,000 bpd -- about half of its average production in 2019. The return of Gharraf could complicate Iraq's efforts to comply with its OPEC quota and force further cuts at other IOC-operated fields. Read the full story for details.

The broker behind Kurdistan's oil sales is a man named Murtaza Lakhani. His role in building the KRG's oil sector has been well chronicled, but a new report from Bloomberg shows how his operations have evolved. Lakhani's company, IMMS, recently filed a lawsuit against Lebanon's BankMed over more than $1 billion in assets that are inaccessible because of that country's financial crisis, and it appears likely that over $300 million of those funds belong to the KRG -- one of many factors behind the government's acute financial distress. According to Bloomberg, court documents clearly show that IMMS was handling money on behalf of the KRG, but "it’s less obvious from the legal filings where the Kurds’ money ends and Lakhani’s own money begins, how lucrative the business of handling the billions of dollars for Kurdish oil was, and who benefited from any profits." Read the full story here.

National News

Prime Minister Mustafa al-Kadhimi traveled to Iran. It was the new Iraqi premier's first official foreign visit, after a trip to Saudi Arabia planned for Monday was postponed due to King Salman’s ill health. During a two-day trip to Tehran, Kadhimi met with Supreme Leader Ali Khamenei and President Hassan Rouhani. Like every Iraqi prime minister, Kadhimi faces a challenge of balancing relations with Iran and the United States. Unlike his immediate predecessor, Kadhimi appears to be making serious efforts to reign in Iran-backed paramilitary groups operating in Iraq -- a campaign that has been met with violent resistance.

"Armed groups or gangs linked to armed groups" were responsible for the kidnapping of German citizen Hella Mewis, according to a security official quoted by the Associated Press. Mewis had been a vocal supporter of the anti-government protest movement and worked to support Iraqi artists. At least two other foreigners have been kidnapped in Baghdad this year, and her abudction follows the assassination of Husham al-Hashimi, a respected analyst aligned with Kadhimi. Mewis was freed on Friday by Iraqi security forces, according to military spokesperson Yehia Rasool.

One sign of the severity of the coronavirus pandemic in Iraq is the logistical challenge that arises from the deaths of more than 3,000 people. Where can they all be buried? Most are being laid to rest in a desert cemetery west of the holy city of Najaf. The New York Times reports on how both medical workers and grieving families are coping, and how Muslim burial rituals have been molded by the pandemic.

Interview of the Week

What is the trajectory of the new Iraqi administration's relationship with Saudi Arabia? That was the subject of an interview with Saudi political commentator Muhammad al-Qabiban on July 19, just before Kadhimi had to cancel his visit to Riyadh due to King Salman's health problems. Qabiban, a retired Saudi Air Force general, emphasized Saudi Arabia’s desire for good relations with Iraq.

This isn't the first [visit of an Iraqi premier]. We've had the visit of Haider al-Abadi, of Adil Abd al-Mahdi, a number of Iraqi guests, friends from various levels, and they've been welcome.... But however much Iraq tries to open Arab-Arab relations, especially with Saudi Arabia, on whatever level -- economics, politics, sports -- difficulties arise. And these difficulties raise doubts and questions: why [do we see] so much enthusiasm from senior Iraqi officials [during the visits], and then after the visits are over, things happen that are the opposite of what we hoped for and the opposite of what the Iraqi people want? ... It seems to me, based on these previous visits, that the Iraqi political system cannot escape the dictates of the [Iranian] Supreme Leader.

Qabiban said that he sees only slim prospects for an easing of tensions with Iran:

If Iran stops its interventions, we will respect it as a neighbor, as a state that has honor, that has a history. We can say -- I'd say -- that it is a star of the Islamic world. And there are benefits which can be derived from Iran's capacities. But when we see that this regime has its eyes on Mecca and Medina, and when we see how they want to internationalize the shrines and politicize the Hajj, and when we see the obstacles during the Hajj created by Iran, does this make us think we're headed towards reconciliation?

Qabiban is not an official government spokesperson, but his remarks likely convey something of the thinking among Saudi Arabia’s decision-makers. They suggest that Saudi Arabia has a significant degree of interest in building relations with Iraq, but also that the Saudis see these relations primarily through the lens of competition with Iran -- a competition in which they do not ever intend to be seen as backing down. The implication is that while there is room for growth in Saudi-Iraqi relations, there are also substantial obstacles to progress, and little hope for insulating economic cooperation from political rivalries.

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