Top Energy Stories

Iraq is getting closer to OPEC compliance. Month-on-month oil production dropped by 265,000 barrels per day (bpd) in June, to about 3.91 million bpd. Iraq Oil Report's analysis, based on field-by-field output data, finds a significantly higher level of production than the estimates produced by OPEC's secondary sources, or the official figures released by Iraq's Oil Ministry. To access the raw field-by-field data behind Iraq Oil Report's production estimates -- as well as detailed, monthly accounting of exports, government finances, and more -- check out the Iraq Oil and Financial Dataset.

Will Iraq cut even further? Oil field data from the second half of the month provide clues about the ministry's intentions for July and beyond. For more details, read the full story.

Prime Minister Mustafa Kadhimi has provided a first indication of his administration's energy policy. In an internal meeting at the Oil Ministry in Baghdad, he outlined a series of priorities, including a focus on increasing the capture of associated gas. The minutes from the June 29 meeting, obtained by Iraq Oil Report, suggest Kadhimi and Oil Minister Ihsan Ismaael are not contemplating many major strategic shifts from the prior administration, and are focused instead on tactical improvements to oil sector operations. Only one major investment project was mentioned by name as a priority to receive financing. Read more here.

Gas flaring isn't just financially wasteful -- it takes a human toll. Pollution from flares has contributed to an ongoing public health crisis in southern Iraq, where cancer rates are high, the air is dirty, and residents lack access to potable water. The problems are easy to see, and vividly portrayed in a story this week by the New York Times. But solutions are elusive. “So, OK, we respect people’s criticism,” former Oil Minister Thamir Ghadban told the Times. “But let them come here and try to operate oil and gas plants under these circumstances.”

Pollution isn't the only problem. Southern Iraq is once again facing dire electricity shortages. When the summer heat drives Iraqis to turn on their air conditioners, the failing power grid provides a perennial reminder of all the ways the government cannot provide basic services, which has historically been a driver of both local and national protests. To stave off bigger problems, the Iraqi government is asking oil projects to contribute some of their power generation capacity to the grid. For details on why Iraq's infrastructure is failing and the latest stop-gap solutions, read more here.

National News

Can Kadhimi gain control over the many arms of Iraq's security apparatus? His early efforts have been met with resistance. The latest casualty was Hisham al-Hashimi, a well respected analyst and advisor, who was assassinated last week outside his home in Baghdad. While no group has claimed responsibility for the killing, many people have pointed their fingers at Iran-backed paramilitaries that have recently been targeted by Kadhimi. Writing for Chatham House, Renad Mansour reflects on Hashimi's deft navigation of Iraq’s political scene – meeting everyone from Iran’s top operatives in Iraq to Western scholars and prime ministers. His access and insight gave him unique influence but also put him at risk, as he aligned himself with Kadhimi and openly criticized the powerful armed groups now suspected of involvement in his killing.

If the assassination was meant to provoke an escalation, Kadhimi is not playing along. Instead, the prime minister appears to be responding indirectly, with a campaign to crack down on a major center of corruption: Iraq's borders. Starting in Diyala and then heading south to Basra, Kadhimi has been touring the country's eastern border, shaking up the leadership and deploying new security forces in an effort to assert more direct federal control. Rather than framing the initiative as an assault on any particular armed groups, Kadhimi has portrayed his efforts as an attempt to control revenue streams that could help Iraq weather a debilitating financial crisis. But, according to the Associated Press, there is little doubt that certain groups stand to lose a major source of illicit funding.

July 10 marked three years since Iraqi security forces retook Mosul from the self-proclaimed Islamic State group – but many of the city’s residents still live among ruins. Reconstruction has moved at a glacial pace. According to AFP, tens of thousands of Moslawis have filed claims with the provincial subcommittee for compensation, but have not received anything. There is little hope for relief any time soon, given Iraq's financial crisis.

Interview of the Week

The government's electricity problems and border initiatives are providing fodder for MPs looking to score political points. In an interview with Dijlah TV on July 12, Faysal Isawi, from Anbar province, and Baha al-Nuri, from Missan, weighed in on the government's performance.

Nuri said the Parliament Oil and Energy Committee is planning to form a sub-committee to review the Electricity Ministry's contracts, including a deal with Siemens. "We don't know why it's not being implemented," Nuri said, adding that the minister could be removed if power service doesn't improve quickly. While summertime failures of the electrical grid have caused several electricity ministers to resign in recent years, there is no indication that Nuri's threat is anything more than television bluster. Isawi took an even harder line, calling for the abolition of the Electricity Ministry entirely, noting that half the country's power supply comes from private generators already.

In response to Kadhimi's border initiatives, Isawi said the only way to gain control of crossings is to hand over control exclusively to the Counter-Terrorism Service. Nuri dissented, arguing the government just needed to make an example of a few corrupt officers. "Make two or three arrests," he said, "then the others will gain some self respect and sit down."

The Week Ahead

Kadhimi plans to visit Saudi Arabia on Monday. According to Deputy Prime Minister and Finance Minister Ali Allawi, the two governments will sign unspecified but "important" agreements.

Airports reopen. Commercial flights are scheduled to resume on July 23 at airports in both federal Iraq and the Kurdistan region. It remains to be seen how the government will enforce quarantine measures for new arrivals and, more broadly, whether the country can ease lockdown measures -- including the reopening of malls -- without causing new case counts to spike.

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