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Welcome to This Week in Iraq, your one-stop source for the most important Iraq news, curated by the editors of Iraq Oil Report. To sign up and receive this free newsletter in your inbox every week click here.
Top Stories
Foreign oil companies are speeding up evacuations of southern Iraq after armed drones struck a key logistics hub in Basra and security officials issued warnings that American companies throughout Iraq are now targets for Iran and its proxies in a widening regional war. Hundreds of staff from a range of international oil companies and oil services firms — including not just American companies, but also British, Italian, French, and Chinese firms — are leaving Iraq, according to officials at the state-run Basra Oil Company (BOC), local security officials, and workers at several different oil fields. The pace and scale of evacuations appears to be increasing after a March 6 drone attack on the Burjisiya complex in Basra, which is a central logistics hub for southern Iraq's oil sector used by several international oil companies and major oil services companies. For further details about the attack and other security threats facing southern Iraq's oil sector, read the full story on Iraq Oil Report.
Iraqi Kurdistan's energy sector also continues to be a target. An Iran-backed paramilitary group known as Kataib Sarkhat al-Quds claimed responsibility for a March 5 drone attack on the Swara Tika oil field, which it characterized as an act of revenge against "the interests of the American enemy" for the killing of Iranian Supreme Leader Ali Khamenei. In the wake of the outbreak of war on Feb. 28, most oil fields in Iraqi Kurdistan had either shut down entirely or significantly curtailed their production, representing a loss of at least 200,000 bpd. Some operators in Iraqi Kurdistan subsequently started bringing production back online, according to multiple industry officials, but the attack on Swara Tika appears to be reversing that trend, as it reinforces widespread perceptions that Iraqi Kurdistan's energy sector now faces even greater security threats than in previous periods of conflict. Read the full story on Iraq Oil Report.
Energy & Economy
The Central Bank of Iraq says foreign reserves can cover 12 months of imports, as it reviews options to protect salary payments in a time when oil revenues have been decimated by war, Erem Business reports. After its board held an emergency meeting, the CBI said its foreign currency reserves are sufficient to cover 12 months of imports, and it discussed multiple options to ensure payment of salaries and essential expenditures in coming months. The CBI claims it has the tools to respond to shocks and maintain monetary stability, including supporting bank liquidity and ensuring the smooth flow of external transfers to cover imports and international payments.
Iraq's Electricity Ministry has outlined a four-track plan for summer as the supply-demand gap remains wide, Attaqa reports. Summer electricity demand is projected to reach 55,000 MW, about twice what Iraq had been producing before the outbreak of war. It's unclear how the conflict will affect plans for a floating LNG terminal at Khor al-Zubair to begin supplementing southern Iraq's electricity supply in June. As recently as March 7, the Electricity Ministry said it expects to activate the new GCC grid connection soon, as links to Jordan and Turkey are 95 percent complete. On March 5, Iraq restarted the Mosul Dam hydroelectric plant, Attaqa reports..
Politics
The Coordination Framework continues to disagree over the fate of Nouri al-Maliki’s candidacy for prime minister. Al-Mada reports that some factions are leaning toward reviving Mohammed Shia al-Sudani as a fallback option. While the alliance of Shia Islamist parties appears to be moving away from Maliki, it remains divided on the tactical question of whether Maliki should step aside or whether the Framework should formally pull his nomination. Meanwhile, Sudani indicated his bloc would pursue talks with other political forces to form the largest parliamentary bloc and move through remaining constitutional steps toward government formation, even as he said a second term is "not a personal ambition."
Analysis & Commentary
Gulf states are balancing deterrence with de-escalation amid regional war, writes Ebtisam Al-Ketbi, in a briefing for the Emirates Policy Center.
The Iran war will have a “catastrophic” impact on Iraq because of its dependence on Gulf oil exports, writes Ahmed Mousa Jiyad in a piece for Albilad.
Iraq squandered roughly $1.5 trillion in revenues since 2006 and became a “welfare state.” Economist Manar al-Obaidi argues in Shafaq News that Iraq has failed to convert its oil revenue windfall into a productive economy, warning the country has instead evolved into what he described as a large “social welfare fund” distributing oil income without generating value.
Iraq is increasingly serving as the primary arena for regional escalation of the Iran war, according to an analysis in the Gulf International Forum.
U.S. support for Iranian dissidents risks regional blowback, the Atlantic Council argues.
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