Oil Pipeline Closed, Costing Iraqi Government $30 Million a day
The continued instability in the Shiite areas of southern Iraq, especially threats of sabotage by Mahdi Army fighters, has led Iraqi authorities to shut down oil facilities in Basra again, according to AFP. Excerpts:
‘ . . . the Southern Oil Company announced the pipeline had been closed for security reasons. “The production has been stopped since the start of the crisis and now we have stopped pumping too through the pipeline,” a spokesman said . . .
The company halted production last Monday following the threats from Sadr supporters. Since then, crude exports from Basra’s two main offshore terminals, the only outlet for Iraqi oil, have been slashed in half, costing the government at least US$30 million a day in lost revenue.
Shutting the pipeline will only deepen the financial crisis faced by the debt-ridden Iraqi government.
“If the entire pipeline is blocked, Iraq will suffer from a daily US$60 million financial loss,” the national security council has said. ‘
The bad news was slightly offset by developments up north, where exports via the pipeline tht runs through Turkey have resumbed.