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Is There a Correlation Between the Level of Violence and the Output of Oil?

Some analysts have been asking the question: is there a direct relationship between the level of violence in a country and its output of oil? In Iraq there most certainly is.

Iraq has witnessed its worst violence since 2008, it has seen its oil production decrease considerably.

As reported Monday by CNN, “the latest figures from Iraq's Ministry of Energy illustrate the "direct link between the violence and the country’s oil output.”

Judge for yourself: Iraq’s oil production went from 77 million barrels during the month of May, dropping to under 70 million barrels in June. At the same time the United Nations recorded the number of killed in this country going from 595 in April to 963 in May and to more than 1,000 in July. This past weekend alone has seen a sharp rise in violence

And judging from what has been happening it Iraq in the past two weeks – multiple car bombs, bombings in cafes, etc., -- the numbers of death are certain to rise past the 1,000 mark. And sure enough the oil production will suffer some more.

Says John Defterios, CNN’s Emerging Markets Editor and anchor of Global Exchange, this has caused major setbacks for Baghdad’s aspiration to challenge Saudi Arabia as the top oil producer.

Related article: GDP Growth must Slow as Oil Limits are Reached

The immediate question that comes to mind is the following. Why are those responsible for the violence in Iraq continue their campaign of terror when they know it is hurting the economy of the county.  The economy is the lifeline of a nation.  A healthy economy produces jobs, which encourages the consumer to spend money on products. That creates a demand for more products and thus a demand for more jobs.

The trend is indeed quite clear.  Looking only at the last three moths’ Iraqi oil production, the country saw a decrease of 2.328 million barrels per day in June. Experts say this is the lowest level not seen since March 2012.

Exports have also been affected and Iraq has witnessed a drop of 155,000 barrels per day in the past month alone. The new figures now stand at 2.483 million barrels per day in May.

The biggest drop in exports was via the Iraq-Turkey Pipeline, which declined from 273,000 bpd in May to 179,000 bpd in June, according to data from the Iraqi State Oil Marketing Organization.

Related article: Is East the New West in Energy Markets?

A country such as Iraq with its vast amounts of oil and natural gas should be able to provide well for its citizens. Yet it finds itself bogged down in a never-ending cycle of violence with the result of hurting the economy, which means hurting the overall well being of many individuals.

Why?

In essence the Islamists of al-Qaida, who one presumes are behind this latest spate of killings, have borrowed, ironically enough, a page form the Marxist–Leninist revolutionary workbook. One needs to make the situation much worse that it currently is before it can get better. Destroy the present to build a better tomorrow. At least that was their philosophy, one which was never properly applied.  In fact when examining the track record of the communist regimes that were in control of most od the world they one managed to achieve half of their objectives: destroying the present…but the never got around to the second part, that of rebuilding a better tomorrow.

Looking at al-Qaida’s modus operandi today, it eerily resembles the manner in which the communists operated. The Islamists, be they in Iraq or in next door, Syria, are bent on trying to establish a base for their operatives. In other words, they are seeking to replace Afghanistan as a safe base of operations.

Claude Salhani is an independent journalist and author of several books on the Middle East. His latest book is an e-book, Inauguration Day, is a novel dealing with terrorism.

By. Claude Salhani




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  • dan on August 14 2013 said:
    Nothing against your take on violence and oil, but maybe the people are just a little pissed at being slaughtered by the UN/US/EU/Israel. They starved 1 million Iraqis to death in the mid 1990s, slaughtered at least 1 million in the 2000s, have over 100 military bases there today, use drones to murder people including innocent people. They have foreigners ruling them-how would you like that? I also noticed you mentioned NOTHING about the Petro Dollar, or that the UN invaded shortly after Iraq stopped selling THEIR oil for dollars (same for Lybia) and Iran stopped selling their oil for dollars and the UN wants to invade them too. Start reporting the whole story, or are you just another propagandist?
  • Steven InDallas on August 20 2013 said:
    Sometimes perpetuating the existing system is just being an enabler for corruption. Kinder in the long run to wipe the slate clean and start from scratch.

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