Truman Project Fellow Kevin Johnson wrote about how the instability of Iraq due to ISIL may have large affects on oil infrastructure and the international oil market. If Iraq's oil fields are disrupted, oil prices will skyrocket and the global market will suffer.
In 2004, I deployed as an Army captain to Baiji, Iraq, located just 155 miles north of Baghdad. The city is home to Iraq’s largest oil refinery, which accounts for more than a quarter of the country’s refining capacity.
My tour in Iraq was served in the shadow of endless oil fires, as frequent insurgent attacks on pipelines coming to and from a nearby refinery lit up the sky. From 2004-2007, the city was a known stronghold for Sunni militants who siphoned oil and petroleum products to finance their operations.
Ten years later, it’s as though I am reliving history.
For more than a week, the world has watched as the Sunni Islamist militant group, the Islamic State in Iraq and the Levant (ISIL) carried out a stunningly swift seizure of large territories of northern Iraq. Late Tuesday, ISIL began a concentrated assault on that same refinery outside of Baiji that I watched burn back in 2004.
This attack on infrastructure has severe implications for the Iraqi people, as any disruption at the refinery threatens electricity supplies and ensures long lines at the pump. The last thing the central government in Baghdad needs right now is a more restless population.
However, the international implications go much further.
Growing concerns over oil infrastructure and regional stability have sent reverberations through the international oil market. According to Bloomberg, the ongoing conflict in Iraq has sent crude oil prices to a nine-month high at $119/barrel on June 13, which reflects a sharp rebound after crude oil prices hit record lows on June 3.
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