Iraqi insurgency, US mess up and the oil prices By Dr. Bobby Srinivasan and Dr. Sudhakar Balachandran


We live in a strange world. The strength of ISIS is unknown as more and more Sunnis from Syria, Saudi Arabia, Iraq along with the released Sunni prisoner of wars are getting ready to topple the Shia government headed by Nauri-al-Maliki. They already have occupied the city of Mosul, which is the second largest in Iraq. Reports say that they have local and financial networks and the Iraqi security forces don’t stand a chance.

The main culprit is the US, which bungled badly. Their foreign policy and intervention in the Iraqi affairs without understanding the under current is now paying the price. After toppling Saddam Hussain regime in 2003, the US forces disbanded Iraq’s long standing army. They removed all the officers who belonged to the Saddam Hussain Baath Party by spending $ 14 billion dollars over eight years in an attempt to build Iraq’s security forces from scratch. They focused on quantity and not quality. They did a shoddy job in training the Iraqis who were least motivated but for the regular monthly salary. The main problem is that these Iraqi soldiers have lost their morale and their faith. They lack the grit and commitment. Zaid Ali, former US advisor and author of the book “The struggle for Iraq’s future” says and I quote “There is not enough of the qualified professional fighters to take on ISIS and the trained guards cannot stand up to them”.

The legacy of American missteps and its failure to develop committed security guards is now unfolding. The smaller Jihadi force are much stronger in their commitment as compared to the security forces and the billion dollar weapons of them are currently in the hands of the ISIS.

Prime Minister Maliki is in a hot seat. All the major political parties in Iraq see him as the main reason for this insurgence. His coalition won 92 of the 328 seats in parliament, putting him ahead of other blocks in the recent March election. The battle ground is expanding. It started with Aleppo, Syria’s second largest city, then expanded to Deir Essor then on to Raqqah a possible city for ISIS to form the government. The city of Baiji is where the largest refinery is being fought over currently. In the meanwhile, Mosul the second largest Iraqi city has been taken over by ISIS. Another city Fallujah has also been taken over by ISIS. Currently the battle is in Kirkuk and Tikrit. Given the present trend, ISIS troops may get mobilized and go after Baghdad in the next few weeks.

Now the ball is in the US court. Is Obama going to send his troops? He has already committed to reducing his defense budget significantly. Will he get the Congress support to reemploy his forces in Iraq? Already the Iraq’s daily oil production had fallen by about 8 percent from its peak of 3.6 million barrels a day.

We in India should develop a long run strategy to store oil in large quantities like the US and China. Sudden disruptions can create a havoc in the oil market and there is potentiality that the oil prices could reach 146 dollars a barrel (currently US $115). As a country, we have no control over both the supply and its price. We are vulnerable but inaction can be catastrophic. As oil price shoots up, the oil companies will want to buy dollars as a hedge. This may push the Indian currency downwards. We have seen enough of this in the past. Let us hope that Iraq’s political situation returns to normalcy in the near term.

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