Financial Times correspondents Daniel Dombey and Carola Hoyos have an interesting alert in today’s paper. They write:
Pipelines vital to Iraq’s oil industry are in such poor condition they could rupture at any time, choking off the supply of oil from the region and devastating the country’s economy, according to the US State Department.
A previously undisclosed notification to the US Congress, obtained by the Financial Times, says the ageing underwater pipelines, which link storage facilities near Basra to offshore tanker fuelling terminals, are in urgent need of back-up or repair. “The likelihood of a worst-case catastrophic failure, subsequent collapse of Iraqi crude oil export revenue resulting in a devastating drop in the Iraqi GDP, global economic market impacts and a possible ecological and environmental disaster should warrant concern,” the document says.
This raises the interesting question of whether Iraq, given its robust surpluses, should be responsbible for pipeline retrofitting — or whether the US should make it a priority?
Or perhaps maybe Iran will swoop to the rescue?
— Steve Clemons