How Iraqi Oil Smuggling Greases Violence

Bilal A. Wahab in the Middle East Quarterly:

“Oil is the lifeblood of Iraq. As Iraqis work to emerge from years of war and sanctions, oil exports are the government’s greatest source of revenue. Since 2003, the new Iraqi government has exported US$33 billion in oil. But rather than just fund reconstruction, oil has become a primary commodity on the black market and a central component of the web of corruption, terror, and criminality in Iraq. Oil smuggling has led to a convergence of crime and terrorism that increasingly destabilizes the country [...]

“Up to 30 percent of Iraq’s imported gasoline has been lost to smuggling networks, half of which is pocketed by the Iraqi insurgency [...] Not only have funds for vital projects been lost, but a portion of the missing revenue helps fund insurgency. Terrorism, in turn, hampers foreign investment. Attacking the oil pipelines could be a criminal enterprise but, regardless, insurgents benefit by extorting protection money from oil trucks. Terrorists and criminals have established a dangerous symbiosis[...]

“While problems associated with subsidies and oil industry corruption may seem mundane amidst continued kidnapping and car bombs, until U.S. and Iraqi authorities manage to constrain Iraqi oil smuggling, violent crime and insurgency will continue to flourish.”

Read it all.

More on this:

Fencing in looters and saboteurs in Iraq

Iraq’s Oil Sector One Year After Liberation (June 2004 paper)

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