Iraqi Oil Update
Iraqi government forces have reportedly thwarted another attempt by the Islamic State (IS) to take over the Baiji refinery in northern Iraq. This refinery accounts for around one-third of Iraq’s total production, but produces for the domestic market, not exports. Key producing fields, for exports, in the south remain unaffected so far by the IS advance. In the meantime, Iran has come out with clear support for new Iraqi Prime Minister, Shi’ite Haider al-Abadi, after the ouster of Nouri al-Maliki. Iran has also been providing Iraqi Kurdish forces with weapons to fight back IS in the north, bringing Iranian and American short-term intentions here in line with each other, which has a number of geopolitical implications further down the road, especially for the Saudis.
IS militants have managed to take control of some areas on the edge of territory controlled by the Kurdistan Regional Government (KRG) in the north, but have not yet breached this official territory and their advances have been limited to the disputed territories of Northern Iraq. The supply of weapons from Iran and the potential for US air strikes against IS should the Kurds require this, leads us to believe that Kurdistan will be difficult to breach.
At the same time, as we expected, the Kurdistan Regional Government (KRG) has won a victory over its $100 million in crude stranded offshore Texas, as a judge threw out the…