Oil’s Decline Threatens Iraq’s Fight Against ISIS

… much of the past twelve months we’ve seen a precipitous decline in the price of a barrel of light sweet crude … and they use see their dad … Nymex is down forty one point one nine of that this was … well over a hundred … in a tiny segments of soda … and still fall in Korea that the numbers we see today … what is good news for motorists is bad news for economies that rely on higher prices … namely those like the rock … the rely on oil revenue to five Islamic State terrorists … the beest Middle East bureau chief Bill Spindle is back in spending some time in Iraq the Joneses and Abu Dhabi … to spell out The Dow’s how a bill … ARU Michael did very well thank so much for joining us … it … said it first up we spent some time with about a militia while euro today and it is time to fight to take … that back to creep in Iraq … I’m … you know the with looking out the fighters in fact the person you Twitter feed from that experience … what what you tell us about this problem you know that the lack of revenue … and the supplies they did go into the strips into what but it’s good for them or Island and their ability to fight … yet it’s in our rock is just in a really difficult spot I it’s one of the country’s as most exposed to the drop in oil prices because nearly all like ninety four five percent of its government budget comes from oil revenue so that’s been cut in half last night the last series in seven eight months so … you know it meanwhile Islamic state is has moved into that they’ve got a huge security from other hand so they had to allocate of a larger chunk of the budget there I think that these these years but does not allocating something like … twenty percent the entire budget … to securities on the one and they’re losing all the revenues on the other expenses are going way up … so they are very difficult situation they’re in town and that’s one of the reasons why … it’s very difficult to get the Iraqi military which is testing in tatters … back in to train Shea … and they’re turning in in fact a lot of these militias … who do with a promise to pay something to but here is much cheaper than trying to rebuild your or your military … the problem is that these militias are are really … very sectarian there are entirely … made up of Shiites … so when a moving into areas like they’re doing now and she creature not be … as they move up towards Mosul … those are all Sunni dominated areas and as they move into them … you get it all sorts of tensions … that result from all of this and you know it’s all just these at survey by the lack of money … what is it mean for the U S and the allies here and and what role that may have to play … more minority are intense about footing the bill on all … beefing up … the security commitment … because clearly if a the top job and somebody has to step in … well that’s the that’s the huge eleven the U S Steel finds itself yet it’s the if it wants to rebuild the Iraqi military wants to strengthen the central government … but … that all costs money that the US is not willing to to pay for them to really did pay for training they’re willing to supply some weapons but … on the other hand they want to be paid for it and in the Iraqi or as little money to do either of these things … so you get these militia … who were kind of running the show that makes it very difficult for the US to purchase it’s a it’s sth it’s essentially sitting out these offences now Inti create … because I think because they’re quite worried about … the implications of them and what might happen there and they they don’t want all happening under … a US air cover … however who’s helping these militias well that Iraq is behind these militias … there really … in a very much … by the funding for and providing a lot of the organization’s so to the extent the US feels a pass to see these things out because of their overtly sectarian nature … at the same time it’s losing a lot of influence … situation because it’s doing a derogatory to as beanie that Iran … in the rainbow is a highly contentious issue … given … the visit would have Congress last week been been been been picking up … the look of it … some of the Iraq grain ABBA to maintain production … aam but ISIS courses had designs on on disrupting that what what is the we have come up with to get it in fact … here that was disruption to … pipelines and then production facilities … the … yes I mean I think I it’s frankly I says it is not a direct threat to all of this it’s more than that of the budget for it that that having to pay to fight ICICI’s is causing its really … in the south … where most of Iraq’s oil is seventy five percent … the problem is really all about infrastructure … a friend up for auction remarkably over the last couple of years … but to continue doing that they’ve got all sorts of infrastructure problems that are gonna hafta be resolved if they don’t have the money to resolve those … that what’s gonna happen is … directed to detail offered out there in the north it has to do with politics the Kurdish … areas in their relationship with this there intense relationship for the central government … is is just … fraud at this point in trying to work out some sort of deal that will allow … continued growth in exports out of the North is is going to be tricky as well if they can solve those problems … Iraq is huge potential if they can they could really go into a downward spiral … sounds like a real mess Phillips puts the thank you very much

(via WSJ)