Iraq’s oil infrastructure used to be a favorite target of militants, but it now faces new problems. In 2007 there were nearly 7 attacks upon the oil industry a month. By the end of that year however, security around pipelines had greatly improved, and incidents dropped off to only 1 or 2 a month. Today, bottlenecks, bad weather, and criminal gangs trying to steal oil are more of a threat to production than insurgents attempting to destroy sections of the pipeline. In fact, as fighting in Iraq has waned, many former insurgents have turned to crime to support themselves. What attacks that do occur are almost all in the north where there are still militants.
Map of Iraq’s Oil Pipelines – Click on image for larger view
The northern pipeline overall only carries a small fraction of Iraq’s exports. In May for example, the Iraq-Turkey pipeline pumped 13.6 million barrels compared to 45.1 million through the southern port of Basra, more than three times more. Any disruption in production is still a serious matter however because Iraq is almost completely dependent upon oil for revenues. The country still has a state-run economy that relies upon petroleum exports for 90% of its funding. These attacks and breaks are major reasons why production continues to fluctuate up and down each month.
SOURCES
Alsumaria, “Iraq oil pipeline subject to sabotage attack,” 6/29/10
Associated Press, “Iraq’s Oil Exports Inch Up in May by About 7.4 Pct,” 6/22/10
Aswat al-Iraq, “Iraq resumes oil pumping to Turkey,” 6/12/10
Iraq Oil Report, “Northern pipeline hard hit by bomb attacks and smugglers,” 6/10/10
O’Hanlon, Michael, Livingston, Ian, “Iraq Index,” Brookings Institution, 6/19/10
Special Inspector General for Iraq Reconstruction, “Quarterly and Semiannual Report to the United States Congress,” 7/30/08
Upstream Online, “Kirkuk Pipe rupture was sabotage,” 6/9/10
3 comments:
Where do you suppose these bandits can sell the crude Joel? Iraq and neighboring countries have state run refineries that don't purchase crude oil. There are two small private refineries in Turkey, but getting crude to those would probably mean pack muling it over treacherous mountains. Hard to imagine any self-respecting smuggler doing that, since a gallon of vodka is worth more than a barrel of crude.
Maury theres oil smuggling going on throughout the Middle East. Iraq has been a major center of it since the 90s when the Oil for Food program started, which opened up an opportunity for Iraqis to sell oil again one way or another. That’s when the criminal gangs grew and theyve been around ever since.
From a report Ive read oil smugglers use a variety of methods. One is to include stolen oil within legal oil shipments using corrupt oil officials, and then the smugglers are given secret payments. A second is to sell the oil to large tankers in the Persian Gulf, which usually involves both corrupt officials, political parties, and the Iraqi navy. The third is to ship the oil in trucks to neighboring countries. Allegedly the Kurdish government does this illegally shipping oil to Iran since they don’t have the official okay to export yet. Iraqi oil is currently selling for over $70 a barrel so even if the black market price is half that there is a huge amount of money to be made. A GAO report from 2007 estimated that Iraqi oil smuggling earned $5-$15mil/day, $1.8-$5.5 bil/year. Another U.S. report estimated that there was 100,000-300,000 unaccounted for barrels of oil per day in 2006. In one crackdown 299 boats were found in southern Iraqi rivers full of oil waiting to be sailed out into the Gulf to tankers. The smuggled oil is supposedly sold to refineries in the UAE, Yemen and India.
Maury this article from todays New York Times has a picture of tanker trucks illegally shipping oil from Kurdistan to Iran.
http://www.nytimes.com/2010/07/09/world/middleeast/09kurds.html?_r=1&ref=iraq
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