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Global oil prices witnessed a dramatic upsurge in recent days in the aftermath of mounting sectarian conflict and instability in Iraq, casting a shadow of civil war and partition in the country. Recently, Iraq has been hit by deadly factional fanaticism and mass killings led by Sunni Muslims, creating deep sectarian alienations within the country through intense violence.
“In the Islamic State in Iraq and the Levant (alternatively the Islamic State in Iraq and Syria, abbreviated ISIS or ISIL), freedom fighters and Sunni Muslim armed groups have stormed several towns on the road to Baghdad after seizing Mosul a week ago; an offensive which only stalled as it approached the mainly Shiite capital”,the ABC news website reported. Within ISIS and the surrounding area of Iraq and Syria, the group of the same name is fighting to establish their so-far unrecognized state and sharia law by seizing most of northern part of Iraq and moving towards Baghdad. As they close in on the capital, the militant group has triggered a fresh round of skepticism over oil supplies and consequently, prices shot up to a nine-month high.
Oil futures for July delivery at the New York Mercantile Exchange stood up at $106.36 per barrel, climbing almost four percent since fighting began in Iraq.
According to Bloomberg the international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced towards Baghdad, threatening to ignite a civil war. The continuing sectarian imbroglio in Iraq over political dominance between Shiites, Sunni’s and Kurds is seen as the key factor in the current jitters on the global markets.
Oil prices have always been super-sensitive to geopolitical crisis, especially in the Middle East, and with Iraq being the second-biggest supplier of crude oil, it is natural to see escalated concerns among investors, as any threat to supplies plays a havoc on pricing.
Crusade for Dominance
The political landscape in Iraq is currently dominated by insurgency for political supremacy between three major sects, and chances of regional conflicts turning into a civil war are increasing. Currently the majority Shiites rule the country, led by the Nouri Al Maliki government, while the minority Sunni Muslims complain of being repressed by the government. The striking changes in authoritative structure from a sectarian perspective over the last 10 years in the country remain at the heart of the crises.
This is because Saddam Hussein’s regime was a minority Sunni-based authority ruling the country. Shiites have often accused the former elitist minority of atrocities suffered during Saddam’s reign. After the fall of Saddam Hussein, the majority Shia-led government came to power and ironically, now Sunni-Muslim’s are making the same allegations of wrong-doings by the Shia government.
For more than a millennium, the rift between Sunni and Shia Muslims in Iraq has served as a battleground for many of the events that have defined the schism between them. Recent political dominance of Iraq’s minority Sunni Arabs and their consequent persecution of the Shia majority has been responsible for renewed violent clashes between the two sects. The ousting of Saddam Hussein provided an opportunity for the Shia to seek redress, the BBC news website reported.
ISIS fighters are continuing their march towards the capital Baghdad where Maliki government has beefed up security around the capital, amid rising uncertainty.
Image credit: Syrian Rebel Watch via Facebook.com