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Iraqi Protests Threaten Oil Production

Iraq protest

At least five people have been killed since the beginning of protests in southern Iraq’s oil hub earlier this month, as security forces respond with a hard hand while thousands continue to take to the streets over rising unemployment and chronically lacking public services.

Demonstrations began in the key oil center of Basra and have since expanded to a number of provinces, prompting the Iraqi government to impose a state of emergency.

Apart from insisting that companies hire locals, the protesters are also demanding a significant improvement in basic services, such as water supply, and their anger, while towards the government initially, is now being rerouted to the oil companies of Basra.

Basra is home to Iraq’s biggest oil fields, and their exports make up more than 95 percent of the country’s state revenue. But now it’s time to answer to a public that is seeing very little benefit from this largesse.

While protests at three key fields—Rumaila (BP), West Qurna 1 (Exxon) and West Qurna 2 (Lukoil)—have not yet affected production, some fear that if the government fails to get a handle on these mounting social grievances, they could disrupt oil and cause another spike in prices, according to Reuters. Indeed, protesters have already attempted to block port access in the region, according to local media.

Local citizens have been blocking access to offices outside the fields since Sunday, demanding, among other things, preference in hiring. Local officials claim that more than 140,000 locals are employed in energy sector, while 50,000 hires were from outside Basra, including foreigners. Protesters are demanding they be replaced.

The protests come as political parties struggle to form a new coalition government in the May elections. So far, Prime Minister Haider al-Abadi’s visits to the area and promises of more jobs for locals and $3 billion for electricity and water projects have not subdued demonstrations.

By Damir Kaletovic for Oilprice.com

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