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By Harith Hasan for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq is currently the scene of a sharp regional conflict between Iran and its opponents. This is nothing new, however. Regional events have come to show that any country witnessing political or social instability, amid weak state control, can be exposed to a similar power struggle on the part of rich and stable regional powers that have a geopolitical agenda.

This is the case in Lebanon, Syria, Egypt, Yemen and Bahrain. One can say that the current regional rivalry is hampering the process of rebuilding the state and national identity. It is due to this rivalry that internal conflicts have become complicated, as they turn into an extension of a wider regional conflict waged by powerful countries on the soft lands of unstable countries.

Moreover, the political, ideological and financial alliances that are forged between the regional powers and their local collaborators fuel internal division. In a country like Iraq, where this division takes on a sectarian character, the regional conflict leaves a major destructive effect.

Therefore, the most violent aspects of this conflict take place in countries where a power struggle is more intense, either because of their strategic importance or due to the lack of an ultimate hegemonic power.

This is particularly the case in Iraq, Syria and Lebanon, which together form the main part of the Fertile Crescent. Step by step, the regional rivalries plaguing these three countries fell within the framework of a wider foreign conflict whose two major poles are Iran and Saudi Arabia.

Thus, it currently seems impossible to deem that the instability plaguing these countries is the result of a mere lack of compatibility between the subnational communities. These communities have increasingly become transnational communities.

By rampant “sectarianization,” we mean that there is in the region a continuous process that aims to establish sectarian, rather than national, identities.

It is noteworthy that this process affects the internal conflict, for the political community is divided over the identification of friends and enemies. Ernst Renan once defined the nation as a group of people united by a common hatred of their neighbors. If this is true, then the current problem in a country like Iraq is the absence of this “common hatred” for a given enemy.

Qatar Airways launched flights on Wednesday to its fifth destination in the Republic of Iraq, Sulaymaniyah, increasing the airline’s frequency across Iraq from 16 to 20 flights each week.

The new services, which will operate four-times-a-week non-stop from the airline’s Doha hub, brings the carrier’s global network to 129 destinations worldwide.

The Doha – Sulaymaniyah route is being operated by a state-of-the-art Airbus A320 featuring 144 seats in a two-class configuration of 12 seats in Business Class and 132 seats in Economy.

Selected aircraft feature seatback TV screens, providing passengers with the next generation interactive on board entertainment system, featuring a choice of more than 800 audio and video on-demand options, together with an SMS text messaging service from each seat.

The launch marks the rapid expansion by Qatar Airways in Iraq since the middle of 2012 when it began flights to Erbil, followed by the capital Baghdad, Najaf and Basra. Sulaymaniyah also marks the carrier’s fifth new Middle Eastern destination launched this year after Basra, Najaf, Gassim in the Kingdom of Saudi Arabia and Salalah in Oman.

The arrival of Qatar Airways’ flight QR438 was welcomed with a water salute at Sulaymaniyah International Airport and a warm reception presided by local officials. Fathi Al Shehab, Qatar Airways Senior Vice President GCC, Levant, Iran and Indian Subcontinent, led an official delegation on the flight from Doha and was welcomed at the airport by Director General Sulaymaniyah International Airport Eng.Tahir Qadir.

By Mushreq Abbas for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The truck bomb that exploded on Aug. 17 at dock No. 17 of the Iraqi port of Umm Qasr located on the Arabian Gulf surprised Iraqi political and security circles. Although the human losses were limited, the operation constituted a serious and exceptional breach of Iraqi security, and suggested that al-Qaeda seeks to cut off Iraq’s only economic gateway to the sea.

The governor of Basra, Majid al-Nasrawi, who belongs to the Basra First coalition and managed to seize the headship of Basra’s provincial council from the State of Law Coalition after the April 20 elections, told Al-Monitor that "his city is paying the price for the political differences in the country." He added that "the security information [available] indicates that vital installations in Basra, a key strategic area for import and export in Iraq, are under threat of being targeted."

Although the political class in Iraq does not openly say that the security situation is being exploited for political purposes, all parties fear that the security escalation would be invested against them politically.

Basra's governor says that his [local council] “will not bear the results of the security deficiencies, since it had demanded that security powers fall within its jurisdiction, as the [central] government in Baghdad insists on managing the security file.”

Nasrawi said that he holds Baghdad responsible for any new security breach, especially given the available information which confirms that al-Qaeda is directing its compass towards Basra. Up to 90% of Iraqi oil runs through the ports of Basra, and a similar percentage of Iraqi commercial traffic with the world passes through it. It also includes a number of major oil wells, which provide Iraq with about 80% of its oil.

By Haider Najm.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

In May, the northern city of Erbil was declared Tourism Capital for the Middle East region for 2014. As Lebanese and Turkish investors compete to spend money there, various obstacles include too-high prices, non-Arabic-speaking border guards, uneven urban development and potential human rights abuses.

Most ordinary Iraqis who have been there know exactly why Erbil, the capital city of the semi-autonomous, northern region of Iraqi Kurdistan, has been named the 2014 Tourism Capital by the Arab Council of Tourism. For someone coming from Baghdad for instance, once their bus has passed through passport and security controls, the gloomy picture of a tormented Iraq changes.

Instead of security checkpoints, men with guns, traffic jams, miitary helicopters overhead and fearful or angry passers-by, one sees reconstruction efforts in full swing. There are public gardens, hotels and casinos, similar to those one would find in any prosperous nation. Many have said that the local authorities' plan is for Erbil to be a lot more like Dubai, with the same economic, touristic and international prestige.

“Erbil is constantly evolving and as officials, we're open to learn from the experiences of the capital cities of Arab and foreign countries so we can benefit from them and put our city in particular, and the Iraqi Kurdish region in general, on the path toward ongoing development,” Erbil's mayor, Nawzat Hadi, told NIQASH. “And we place particular emphasis on tourism – there's a big budget to get the city ready for next year.”

The title of tourism capital is, as the New York Times put it recently, “a singular honour for a non-Arab city. It won out over Beirut, Sharjah and the Saudi resort of Taif”.

Anbar province recently announced its completion of a 12 billion Iraqi dinar ($10.3 million) highway project linking western Iraq to Saudi Arabia.

Anbar province spokesman Mohammed Fathi Hantoush explained that the highway, called the Land Pilgrimage Road, is 230 kilometres long and links central Anbar to the Saudi border at Arar border crossing.

Hantoush added that the highway is slated to be used for hajj, umrah and trade exchange purposes, and aims to improve trade relations and religious tourism between the two countries.

The highway was constructed by local and government companies, and was completed within two years.

(Source: Al-Shorfa)

On Friday, the International Energy Agency warned that oil supply from the Organization of the Petroleum Exporting Countries was falling, as it raised its forecast for demand for the exporters group's crude this year.

"Continued supply outages in Iraq and Libya…may reduce the group's output in coming months," the IEA said in its monthly oil market report, adding that while global supply is still sufficient to meet demand, the market may be slow to adapt to the disruption.

The IEA, which represents some of the world's largest oil consumers, pegged demand for OPEC's oil at 29.8 million barrels a day this year, an increase of 200,000 barrels a day from last month's forecast. That is still comfortably below the group's average production in the first half of the year of 30.6 million barrels a day. Demand last year was 30.3 million barrels a day.

Disruptions to production in Libya and Iraq resulted in a fall in OPEC crude output of 170,000 barrels a day in July, compared with June, more than offsetting an increase in Saudi Arabian production to its highest level this year.

According to OPEC's latest monthly oil market report, also published Friday, the group's output fell in July to its lowest level since March.

However, strong supply growth from oil producers outside OPEC, coupled with easing demand from refineries in the coming months, could mitigate the disruptions, the IEA said.

According to the Wall Street Journal, markets could still be disrupted because the production growth is in a different part to the world to the supply disruptions, according to Antoine Halff, editor and head of the oil industry and markets division at the IEA.

"A lot of the disruption in supply is really affecting European and Asian market and supply is coming from the American market," he said. "It's not an immediate one-to-one replacement; if you lose it now in Libya, you can't make it up immediately with a barrel from the U.S."

The production of Libya's main grade of crude oil, called Es Sider, has collapsed after the terminal that exports the oil to global markets was shut by protesters demanding more jobs or unpaid wages, Libyan oil officials told The Wall Street Journal Wednesday.

These protests caused Libya's production to dwindle to just 400,000 barrels a day at the beginning of August compared with an already reduced output of 1 million barrels a day in July, according to the IEA's figures.

Oil supply from Iraq fell below 3 million barrels a day for the first time in five months in July as a result of attacks on a major pipeline, the IEA said. Production in the country is forecast to drop again in September by 500,000 barrels a day as a result of planned infrastructure work at its southern oil export terminals.

Based on July's production figures, that would take Iraq's output down to around 2.5 million barrels a day in September, its lowest level in more than two years.

The work planned for September on Iraq's southern export terminals is necessary to eliminate bottlenecks that already constrain production, said Mr. Halff.

Iraq aims to boost its oil production by 360,000 barrels a day by the end of the year, to reach 3.61 million barrels a day, Abdul Mahdy al-Ameedi, the head of the Iraqi oil ministry's petroleum contracts, told The Wall Street Journal Wednesday.

If they go according to plan, the infrastructure improvements will increase export capacity, said Mr. Halff, although he warned that the work could over run. "Officially they've said it's going to take a month, but expectations are it could be more like 5 or 6 months."

(Source: The Wall Street Journal)

By John Lee.

OPEC crude output hit a four-month low in July as unrest and conflict in Libya and Iraq disrupted supplies, a Reuters survey found on Wednesday.

Supply from the organization averaged 30.25 million bpd, down from 30.38 million bpd in June, and the lowest since March 2013 when the group pumped 30.18 million bpd, the survey of shipping data and sources at oil firms, OPEC and consultants found.

The survey further illustrates that internal strife is undermining supplies from African OPEC producers and putting a brake on the plans of Iraq, OPEC's second-largest producer, to expand exports - propping up oil prices.

In July, involuntary curbs by Iraq and Libya have outweighed extra crude from top OPEC exporter, Saudi Arabia, which industry sources say has refined more crude and sent more to domestic power plants to meet demand for air conditioning.

The most notable drop in OPEC output has come from Libya. Protests at oilfields and terminals have cut supply further to around 1.15 million bpd.

Iraq's exports have slipped to 2.25 million bpd in July, according to shipping data. Iraq's Sunni insurgents are targeting its northern pipeline, while technical problems in the south have also weighed on supply.

The world's fastest-growing exporter in 2012, Iraq is at risk of seeing its output decline this year.

(Source: Reuters)

By John Lee.

Volvo Group Trucks is on track to grow by 30 percent in the Gulf region by 2015 on the back of a construction boom in Iraq and a strong economy in Saudi Arabia, according to a report from The National.

Stefan Soenchen, business team director in Iraq, said:

"The key markets are Saudi Arabia and Iraq, [which is] where we expect the biggest growth. The whole infrastructure was destroyed [after the invasion of Iraq], so it is necessary to do huge investment over the next five to ten years to rebuild the whole country. That is then a normal growth from year to year."

The company operates two truck centres in Iraq in partnership with ZamZam General Group and plans to open a third by the end of the year. There will also be a new truck assembly line in Babylon-Iskandariya, which will be one of the first in the country.

(Sources: The National)

By Mustafa al-Kadhimi for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi-Saudi relations is the most complex issue that Iraq has to deal with. But, at the same time, it is the closest to being resolved if the political entities of both countries prove to be serious about resuming the historical relations that brought their countries together.

While Iraqi-Saudi relations were never at their best — except for short periods of time — the iciness that gripped them never prevented both from appreciating the reciprocal strategic, cultural, human and religious roles that they played in the region and the world.

By completely cutting off Iraqi-Saudi relations in the aftermath of Iraq’s invasion of Kuwait, Saudi Arabia joined the ranks of the front that endeavored throughout the 1990s to curtail the role played by Saddam Hussein’s regime, contain its regional ambitions and eventually lead the political charge that resulted in its downfall in 2003.

Everyone remembers that Saudi Arabian health and political crews rushed to enter Iraq in the early days that followed the toppling of the regime, in a clear indication that the kingdom was ready to open up politically and economically to Iraq.

But this openness never truly materialized as a result of mistakes committed by both sides.

First, Iraqi political leaderships that ruled the country from 2003 onward never really understood the strategic weight that Saudi Arabia possessed. Furthermore, they often behaved and reacted in an emotional and undisciplined manner when confronted with the role played by the kingdom in Iraq and the region. This behavior was construed in the kingdom as an indication of Iraq’s unwillingness to establish deep and strong relations with Riyadh, while rushing headlong to bolster relations with Iran.

Second, in turn, Saudi Arabia did not expend real effort to restore normal relations with Iraq, and did not return in force to the Iraqi arena — nor did it encourage Saudi investors to do so, which the Iraqis interpreted as an attempt by the kingdom to impose a conditional relationship.

In both cases, the subjects of terrorism and sectarian polarization in the region greatly affected the relationship. Iraqis did not differentiate between Saudi terrorist militants fighting in Iraq and the kingdom. Meanwhile, Saudi Arabia construed Iraq’s relationship with Iran as emanating from a Shiite desire to threaten the region’s Sunni Muslims.

All these ambiguities hampered the evolution of the relationship, and increased the coldness with which each country regarded the other.

In this regard, Ali al-Mousawi, spokesman for the Iraqi prime minister, told Al-Monitor on July 18 in Baghdad, "Relations between the two countries were in a holding pattern as each of them considered what their political stance would be."

The truth is that their relationship has undergone numerous developments during the past years, which portend to the possibility of greatly improving. Following the Arab Summit meeting held in Baghdad in 2012, Saudi Arabia decided to appoint a non-resident ambassador to Iraq — a move that was greatly welcomed by the Iraqis.

And, on June 15, in another sign of increasing trust, Iraq signed a prisoner exchange agreement with Saudi Arabia, which was followed by an actual exchange of prisoners between them as a prelude to this file being closed once and for all. Furthermore, Saudi sources confirmed earlier this month that a senior Saudi delegation would visit Baghdad soon to pave the way for the reopening of the embassy in Iraq.

All these indications are important, but, both sides must work toward bolstering their relationship and put an end to the probing and shaken confidence that has lasted for years.

Saudi Arabia must resume its active role in Iraq and open the door toward strategic long-term relations with Baghdad. This will not only serve the interests of both countries, but will effectively contribute in appeasing the sectarian tensions that have been markedly increasing in the Middle East over the past years.

The pivotal role that Iraq and Saudi Arabia can play in restoring balance to the region previously justified the prolonged periods of mistrust that characterized their relationship. It should now justify ending this period and start a new one predicated upon the preservation of their mutual interests.

Mustafa al-Kadhimi is an Iraqi writer specializing in defense of democracy. He has extensive experience in documenting testimony and archiving documentaries associated with repressive practices.

By John Lee.

Iraq has offered three discovered oilfields to India "on a nomination basis" and agreed to renegotiate a contract pending since 2000, reports Telegraph India.

Oil Minister M Veerappa Moily told reporters that Iraq offered to give state-owned Indian firms the Kifil, West Kifil and Merjan oilfields in the Middle Furat region in central Iraq.

The fields, south of Al-Razaza Lake, have estimated reserves of 600 million barrels of oil.

He said the “fields are discovered and work can start immediately”.

This is the first time in the recent history that Iraq has offered fields on a nomination basis -- previously it had asked Indian firms to participate in competitive bidding.

Also, Iraq has agreed to renegotiate and conclude the contract for Block 8 with ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation. The block, located in the western desert in southern Iraq bordering Saudi Arabia and Kuwait, was awarded to OVL in November 2000 by the then Saddam Hussein government. It is estimated to hold 645 million barrels of in-place reserves, of which 54 million are recoverable.

Moily said Iraq also agreed to consider investment in the upcoming 15-million-tonne refinery of Indian Oil Corporation (IOC) at Paradip in Odisha.

The Opec producer further committed itself to meeting the long-term requirement of crude oil of India and was willing to consider favourable commercial terms, including extending the interest free credit period from 30 to 60 days.

Iraq supplied 24.04 million tonnes of crude oil to India in 2012-13.

(Source: Telegraph India)