Yesterday afternoon President Obama announced that the U.S. would send 300 military “advisers” to Vietn…I mean Iraq.
My mistake, but we’ve all heard this one before. At the same press conference, he also said: “American combat troops are not going to be fighting in Iraq again.”
In other words, the President just created another line in the sand.
And this time he just may have to break it…
You see, although it looks like Iraq is in shambles, much of the violence centers on centuries-old sectarian disputes. Do we really want to get involved in a religious war?
What you can bet on, however, is that U.S. combat troops will be fighting in Iraq the moment ISIS makes a legitimate play for Basra.
As you probably know, southern Iraq is where nearly all of Iraq’s oil exports are located. If the rebels take Baghdad and move into the oily southern region expect more than just advisers to be sent to aid Iraq.
The rebels are certainly wreaking havoc on the country’s oil industry thus far. You might recall that they attacked Iraq’s largest refinery just north of Baghdad in Beji.
For now, exports of crude oil from the south remain largely untouched, and after record export numbers in February, the Iraqi government is desperately trying to boost its production and develop their economy to help fight rebels like ISIS.
Take a look at this chart…
As you can see, there will be hell to pay if rebels get too close to the oil in the south since the U.S. and Europe rely on almost half of all Iraq’s oil exports.
Also China, who has been building up their military the past few years, could get involved since they take another 13% of Iraq’s daily production.
Here’s the bottom line: Iraq wants to produce 8.4 million barrels per day after 2018, and in order to do so they need to be able to control national security.
If that security is threatened, as it is now, the U.S. NATO, and whoever else has a stake in their production will likely step in to help.
But as of right now, Iraq’s oil crisis is tempered by the still safe southern region on the Persian Gulf.
Until next time,