What Will The World Lose If The Iraqi Oil Fields Stop?

The people of Baghdad and the southern provinces rushed to markets to buy their needs after the situation deteriorated, as a result of the Sadrist movement's decision to retire from politics, and demonstrators stormed government and Shiite party headquarters.

Demonstrators, most of them supporters of al-Sadr, closed the Ahdab oil field in Wasit Governorate (southern of the country), which produces more than 120,000 barrels per day. In addition, they closed the Umm Qasr port, from where significant quantities of oil are exported, and besieged the Shuaiba refinery. 

At the same time, clashes between gunmen from different parties, armed militants, and security forces inside the Green Zone (central Baghdad) until Tuesday morning,.

The UAE and Iran suspended flights with Iraq, and several countries called on their nationals to leave as soon as possible, fearing that the situation would deteriorate further. This crisis will affect investment, as most investors will leave the country and will search for another safe environment, which means that Iraq will lose billions of dollars.

Oil disaster

It is feared that the demonstrators will expand and storm the oil fields in the south of the country, where most of the Iraqi oil wealth is located. This means that the oil market will lose more than 3 million barrels per day, which represents Iraq’s exports from the south. This will be reflected in the oil market, especially in countries like Italy, Spain, Greece, Turkey, and the Netherlands, which depend mainly on Iraqi oil to cover their consumption.

The oil expert, Hamza Al-Jawahiri, commented on the possibility of stopping production in the oil fields, telling Al-Jazeera Net that "the people will starve to death if the oil fields stop producing because the country depends on oil to pay the salaries of employees."

Iraq's economy is 94 percent dependent on oil, with the erosion of productive sectors such as industry and agriculture, due to financial and administrative corruption, despite spending billions of dollars.

He added that stopping production in any field, or refinery, will lead to Iraq losing millions of dollars with the difficulty of returning production to its predecessor, believing that stopping oil exports is very difficult, for many reasons, including the presence of export platforms deep in the sea, and everyone realizes that oil represents a red line for the Iraqi people.

Al-Jawahiri does not deny the presence of some well-known opportunist figures, who are pushing people to demonstrate near the oil fields for personal financial purposes only.

He indicated that any security development that affects Iraq's exports will lead to a direct impact on oil prices, and this is what Western countries cannot bear, especially as they suffer from a rise in fuel prices, in light of the continuing Russian war on Ukraine.

Food and other products consumption

Citizens emptied most of the shops and commercial centers after purchasing food and basic items, as a result of the placement of the curfew, in addition to the huge crowding at gas stations. Consequently, as large commercial centers became empty and closed their doors.

The seller of vegetables and fruits, Mustafa Kazem, told Al Jazeera Net that the curfew pushed people to storm our store, and they bought large quantities of vegetables that would suffice them for a week only. 

He added that only a few bought fruits and the demand for bread, eggs, and others increased, and most stores raised prices, whereas the citizen was obliged to buy them at any price, for fear of the unknown future.

The price of the dollar rose to 1500 dinars, and a large number of citizens withdrew money from banks, fearing that demonstrators would storm it.

An informed source told Al Jazeera Net that the continuation of violence for other days will lead to the withdrawal of foreign companies, especially since some foreign workers have left Iraq, noting that Iraq's losses, if operating projects stop, will exceed 20 billion dollars.

The signs of investment in Iraq began to appear after 2018, with the entry of large companies into several sectors, including housing and industry These projects were previously limited to the energy sector.

Economic paralysis

The economist, Basem Jamil Antoun, told Al Jazeera Net that "the current situation will lead to the withdrawal of a large number of investors, and increase the unemployment and poverty rates."

He explained that 8 million workers in the private sector will be affected by the repercussions of the recent conditions, and the economy will be completely paralyzed. This will affect sustainable development.

He pointed out that several sectors have stopped, including tourism and transportation, and the markets have been emptied of goods. This is a loss for the national economy.

He indicated that "the country has entered a major economic problem, which is the deteriorating security situation, with the absence of a government to approve the budget for the current and next years."