John Robb made this interesting point a few days ago:
Over the last year, Iraq’s global guerrillas have used attacks against gas and oil pipelines to disrupt electricity production. They have been very effective. Electricity production is substantially less than demand and extremely erratic. There are signs that they are getting more effective (see the brief Cascading System Failure for more). Recent attacks show that it is possible to control Iraqi oil exports through power disruptions. Over the last month, interdiction of electrical power has stopped oil exports from its southern oil terminals twice. Due to an electricity failure last month, the facility suffered a 24 hour shutdown, at a cost of ~$100 million to the struggling country. Yesterday’s attacks on a gas and oil pipeline that feed Baiji refinery were sufficient to cause a power failure that shut down exports again. This is a critical line of vulnerability that will be exploited in the destabilization of Saudi Arabia.
In light of this theory, consider this story from yesterday:
DUBAI, Jan 11 (Reuters) Iraq will cut its Basra Light crude oil supply contracts by 10 per cent from Feb 1 through to June due to technical problems, a senior Iraqi oil official said on Tuesday.
The 160,000 barrels per day (bpd) reduction comes as exports from Iraq’s northern oilfields remain halted by sabotage, dashing the U.S.-backed government’s hopes of raising revenue to fund rebuilding and a costly security apparatus.
[…]
Power cuts that has worsened throughout the country has disrupted sales on Saturday, but loadings had since resumed.
Shipping data showed southern exports running at 1.5 million bpd on Tuesday. The tanker Gosglory Lake was loading at 44,000 barrel per hour from berth one at the Basra terminal. The tanker Margaux was loading at 20,000 barrel per hour.
The Basra terminal, offshore in the Gulf, is crucial to sustain flows with sabotage attacks keeping exports of Kirkuk crude from Iraq’s northern fields at a standstill for the past three weeks.
The attacks have virtually stopped oil production in the north, which has a diminished postwar capacity of 700,000 bpd.
A bomb ripped off a section of a pipeline feeding 350,000 bpd Baiji refinery on Tuesday and another attack targeted a pipeline feeding a power station in the same area, southwest of the oil centre of Kirkuk.
”Kirkuk is finished for now,” the official said.