The Geopolitical Future Of Iraq Hangs In The Balance

While everyone is monitoring a war in Europe, Iraq - OPEC’s second-largest producer - is experiencing the climax of a long-running political stalemate that will have major geopolitical ramifications. Mass protests led by influential Shi’ite cleric Moqtada al-Sadr, the premier anti-Iranian force, have taken the political situation to its breaking point. This is where Iraq’s future is decided, pro- or anti-Iranian. 

This week saw al Sadr’s protesters enter Iraqi parliament to create a standstill following the nomination of a pro-Iranian figure as a prime ministerial candidate. Al Sadr runs his protesters like the conductor of an orchestra. Normally, in such a situation, the leader of protests loses control and the protests take on a life of their own, but no such thing is happening here. On Tuesday, the fourth day of protests, Al Sadr ordered those same protesters to leave the building but set up right outside, in Baghdad’s Green Zone, and called for the dissolution of parliament and early elections. 

So just how influential is Al Sadr - a Shi’ite who opposes Shi’ite Iranian control in Iraq? He is influential enough to have a completely compliant public force of protesters to demonstrate his power, but not influential enough to have won a majority to form a government in last October’s parliamentary elections. His party won, but the win wasn’t solid enough, and he refused to form a coalition government. 

In October this year, it will have been a full year since Iraq had a functioning government. Its interim prime minister - Mustafa al-Kadhimi - is ineffective, at best. What we are witnessing now is the run-up to a potentially violent outcome after nearly a year of paralysis. Oil markets should be paying very close attention. Al Sadr’s protests are sparking counter-protests, and this is where the fight becomes (partially at least) pro- and anti-Iranian. 

One of Al Sadr’s fiercest rivals is former prime minister Nouri al-Maliki - a pro-Iranian puppet. Instability is rife in Iraq, including in northern Iraq’s Kurdistan region, where Iranian proxies have been launching missiles, targeting energy facilities, in an apparent bid to push the Kurds toward a pro-Iranian solution in the Iraqi government. As it stands, Iran is angry that Kurdish leader Masoun Barzani has allied with Al Sadr in the government, even though the Kurdish parties refused Al Sadr’s overture to form a coalition government with them and Sunni parties against the Iranian-backed Shi’ites. Iran’s missile attacks on Kurdish targets are meant to push this to a conclusion that suits Tehran’s agenda.  

But the broader agenda here is more subtle: Iran simply wishes to further weaken Iraq’s central institutions, rendering them unstable enough to control by proxy. Why could the Kurds be pressured to fall into this trap? Because they would also like a weak Baghdad that lacks the power to essentially take control of Kurdish oil operations and contracts - a move that is already in motion and has been a long-running battle between Erbil and Baghdad. 

Al Sadr himself benefits from a weak Baghdad, and while this is now largely a battle between Al Sadr and Al Maliki - both are corrupt and neither has Iraq’s interest in mind. From all sides, then, the ultimate goal is a paralyzed Iraq that can contain high-end corruption and be used by all as a proxy for various nefarious ends. The “pro-Iranian” and “anti-Iranian” elements of the latest manifestation of this battle between Al Sadr and Al Maliki are not necessarily genuine. They are a means to an end, and either one would change “pro” for “anti” should it benefit them (and they have, in the past). 

Even without this turning into a civil war, Iraq’s oil industry is at risk, run by a government that isn't real and faced with major challenges in moving the industry forward at a time when OPEC+ is stretching spare capacity thin.