As we have noted on numerous occasions, despite the continued influx of investment in Iraq, the situation is untenable and each month moves closer to an all-out civil war. First, we’ll give you the security run-down, then we’ll get into the oil.
• On 30 December, the Iraqi central government moved to demolish a Sunni protest camp in Ramadi (Anbar province) and negotiated the withdrawal of government forces from the province.
• On 1 January, while those forces were pulling back, Islamic militants (under the umbrella of the Sunni Islamic State of Iraq and the Levant, ISIL) seized key areas of the province’s largest cities—Ramadi and Fallujah, for all intents and purposes temporarily wresting control of these key areas from the central government.
• By 3 January we were witnessing high-intensity clashes between the ISIL and government forces. Adding to the mix were local allies supporting the government forces. The death toll so far remains unclear, but over 100 were killed in Ramadi and Fallujah alone on the first day.
• There was a major miscalculation made here by the central government, which moved immediately to say that Fallujah had fallen to the ISIL, when in fact, the result of the clashes was to allow local tribes, clerics and former officers to regain control of the city. However, the central government, having itself lost control, made…