Protests over unemployment, poverty and the lack of services have been growing daily in southern Iraq. Curfews have been implemented and the internet has been shut down in an attempt to curb the demonstrations. Instead, the protests have spread from Basra to neighboring cities with violence resulting.
An attempt to storm government buildings in Basra was stopped only after Iraqi military members fired upon the crowd, killing four and wounding three others. (Iraqi News) Two more were killed and dozens injured in neighboring Maysan. (Express Tribune)
In an effort toward a balanced approach, Prime Minister Haider al Abadi has promised more investment and an immediate cash influx into the Southern region of Iraq. The hope is that positive action combined with the restrictions will quell the unrest. His efforts are being undermined by Iraq’s top Shi’ite cleric, Grand Ayatollah Ali al-Sistani. al-Sistani has spoken out on behalf of the protesters, citing an “extreme lack of public services”. (Reuters)
Basra, the focal point for the protests, is important because it is where much of Iraq’s wealth is generated. 95% of Iraq’s oil production moves through Basra, where refineries and port facilities allow for ease of operations. That specialization, however, also leaves it open to potentially crippling strikes if that production is stopped… which is one of the threats associated with the protests.
The United States is already seeing a rise in fuel prices due to increased worldwide fuel consumption. Although the prices have not spiked as high as they have been in recent years (average price of a gallon of regular gas is currently $2.87 per AAA, while in 2008 they rose as high as $4.11) This has reportedly caused President Trump to consider tapping the Strategic Petroleum Reserve (SPR), fuel held for potential military and emergency domestic usage as an insurance policy against catastrophe. From Bloomberg:
The Trump administration is actively considering tapping into the nation’s emergency supply of crude oil as political pressure grows to rein in rising gasoline prices before congressional elections in November, two people familiar with the situation said.
No decision has been made to release crude from the 660-million-barrel stockpile, known as the Strategic Petroleum Reserve, but options under review range from a 5-million-barrel test sale to release of 30 million barrels, said the people, who requested anonymity to discuss non-public deliberations. An even larger release is possible it were to be coordinated with other nations.
The decision to release part of the stockpile for political gain (parties in power typically perform better during elections when fuel prices are low) rather than emergency requirements is within the President’s authority, but carries political risks.
Iran’s OPEC representative, Hossein Kazempour Ardebili, Iran’s representative to OPEC, is capitalizing on the reports about the SPR by blaming the United States. From Reuters:
Iranian OPEC Governor Hossein Kazempour Ardebili told Reuters that Trump “should have expected” when blocking Iran’s access to the global markets that it would end up as “hostage (to) Saudi Arabia and Russia”, who he said had little vested interest in bringing down prices.
“The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in U.S. gas stations, is solely upon your (Trump’s) shoulders and the price of over $100 per barrel is yet to come,” Kazempour said.
By laying the blame pre-emptively, Iraq seeks to further undermine American support worldwide. Rising prices of oil affect every nation, and as the recent protests in Haiti demonstrate, fuel is needed for safety and prosperity.