Is There a Correlation Between the Level of Violence and the Output of Oil?

Some analysts have been asking the question: is there a direct relationship between the level of violence in a country and its output of oil? In Iraq there most certainly is. Iraq has witnessed its worst violence since 2008, it has seen its oil production decrease considerably. As reported last week by CNN, “the latest figures from Iraq’s Ministry of Energy illustrate the “direct link between the violence and the country’s oil output.”

Judge for yourself: Iraq’s oil production went from 77 million barrels during the month of May, dropping to under 70 million barrels in June. At the same time the United Nations recorded the number of killed in this country going from 595 in April to 963 in May and to more than 1,000 in July. This past weekend alone has seen a sharp rise in violence

And judging from what has been happening it Iraq in the past two weeks — multiple car bombs, bombings in cafes, etc., — the numbers of death are certain to rise past the 1,000 mark. And sure enough the oil production will suffer some more. Says John Defterios, CNN’s Emerging Markets Editor and anchor of Global Exchange, this has caused major setbacks for Baghdad’s aspiration to challenge Saudi Arabia as the top oil producer.

The immediate question that comes to mind is the following. Why are those responsible for the violence in Iraq continue their campaign of terror when they know it is hurting the economy of the country. The economy is the lifeline of a nation. A healthy economy produces jobs, which encourages the consumer to spend money on products. That creates a demand for more products and thus a demand for more jobs.

The trend is indeed quite clear. Looking only at the last three moths’ Iraqi oil production, the country saw a decrease of 2.328 million barrels per day in June. Experts say this is the lowest level not seen since March 2012.

Exports have also been affected and Iraq has witnessed a drop of 155,000 barrels per day in the past month alone. The new figures now stand at 2.483 million barrels per day in May. The biggest drop in exports was via the Iraq-Turkey Pipeline, which declined from 273,000 bpd in May to 179,000 bpd in June, according to data from the Iraqi State Oil Marketing Organization.

A country such as Iraq with its vast amounts of oil and natural gas should be able to provide well for its citizens. Yet it finds itself bogged down in a never-ending cycle of violence with the result of hurting the economy, which means hurting the overall well being of many individuals. Why?

In essence the Islamists of al-Qaida, who one presumes are behind this latest spate of killings, have borrowed, ironically enough, a page form the Marxist–Leninist revolutionary workbook. One needs to make the situation much worse that it currently is before it can get better. Destroy the present to build a better tomorrow. At least that was their philosophy, one which was never properly applied.  In fact when examining the track record of the communist regimes that were in control of most od the world they one managed to achieve half of their objectives: destroying the presentbut the never got around to the second part, that of rebuilding a better tomorrow.

Looking at al-Qaida’s modus operandi today, it eerily resembles the manner in which the communists operated. The Islamists, be they in Iraq or in next door, Syria, are bent on trying to establish a base for their operatives. In other words, they are seeking to replace Afghanistan as a safe base of operations.

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Claude Salhani is an independent journalist and author of several books on the Middle East. His latest book is an e-book, Inauguration Day, is a novel dealing with terrorism. Originally written for, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.