Shia Parties Battle for Control of Oil-Rich Basra Region

Political parties and their militias are fighting for power over the Basra government, the oil sector it controls, and the oil and fuels smuggling that bring in extra funds.

The southern area, where much of Iraq's oil wealth is located and nearly all its oil exports are sent to market, has been under the purview of British troops, who have allowed various factions to become the power base and their armed outfits to flourish.

Now the British are leaving, and the intra-Shiite fighting that bloodied the streets and complicated provincial politics will explode. Even if U.S. troops, already stretched thin, are sent to mediate, the situation will likely not be calmed -- it will likely be inflamed.

"It's fundamentally related to the battle over oil," said Reidar Visser, editor of the Iraq Web site historiae.org and an Iraq expert at the Norwegian Institute of International Affairs. "It's understandable, of course, given the size of the Basra reserves."

Nearly 80 percent of Iraq's 115 billion barrels of proven reserves -- the third largest in the world -- are buried in or around Basra. With the northern pipeline shut by attacks, most of the 1.6 million barrels of oil per day exported last year went through the port in Basra, bringing enough money to Baghdad -- more than $31 billion -- to fund 93 percent of the federal budget.

That makes control over Basra key. Whoever controls the provincial government -- and/or has strong enough militias -- has charge over the oil industry there and holds sway in the unknown amounts of oil and fuel sidetracked to the smuggling racket.

"The way things work in Iraq is if you have even a simple majority on the governing council, you get to elect the governor, the police chief, you get to put your militiamen into the police," said University of Michigan Middle East expert Juan Cole, "and the provincial government becomes a source of patronage for your party."

In Basra, three Shiite parties, powerful in their varied own right, swap allegiances and gunfire and jockey for position: the Fadhila Party, the Supreme Iraqi Islamic Council (formerly the Supreme Council for the Islamic Revolution in Iraq), and the Sadr Movement, led by cleric Moqtada Sadr.

The Fadhila Party gained control of the province in the 2005 elections, but only with 21 of 41 seats, and with a coalition of other parties and independents. SCIRI took the rest. Sadr has no official seats but loyalists.

All three began their power play, infiltrating the police and the bureaucracy. The Fadhila Party grabbed control of the oil facilities protection service, which put it "in a position to really control how much is or is not smuggled," said Ken Katzman, Middle East expert at the Congressional Research Service. "You can do whatever you want … it's control over the proceeds of the smuggling."

Exact figures are not known, but various estimates put smuggling of both oil and fuel past the billions of dollars mark, annually.

"That's money that the factions are going to control directly," he said.

When SCIRI and Sadr realized Fadhila was bringing in smuggling money, they wanted in. Smuggling isn't a new phenomenon; it was standard under Saddam Hussein's rule, usually with his approval.

Nor is it relegated to just political parties. Other militias and gangs are in it as well.

But the political parties have the most power. Fadhila cut a deal with its rivals.

"Their militias -- the Mahdi Army (Sadr), the Badr Corp (SIIC) and the Fadhila militia -- operate as paramilitaries in the city," Cole said. "They patrol neighborhoods, they fight turf wars for control of neighborhoods, they attack each other's party headquarters, and they are in particular competition for gasoline smuggling."

But politics in Baghdad have a direct relationship to the country's oil capital.

Prime Minister Nouri al-Maliki's government, struggling to stay in power, began unraveling when it replaced a Fadhila-supported oil minister with one the Supreme Council backed. Maliki is from the Dawa Party, closely aligned with the Supreme Council, now SIIC. Its United Iraqi Alliance government also included, among others, Sadr and Fadhila. Earlier this year Fadhila quit the UIA, in large part over losing the Oil Ministry, and Sadr left over disputes with Maliki. SIIC became more powerful and looked to Basra as Fadhila and Sadr militias (and the militia-heavy police) fought turf wars. It orchestrated a vote of no confidence in the Fadhila Party governor of Basra. A handover of power hasn't occurred yet. "Apparently, they'd have to actually fight militarily for control of the bureaucracy," Cole said.

The intra-Shiite fighting is something of a quiet storm, even class warfare, as politics in Baghdad tumbles on Sunni, Shiite and Kurdish factions' demands and U.S. forces focus on violence from, and often between, Sunnis and Shiites.

SIIC has the overt backing of Washington and, ironically, having grown up in Iran for more than two decades before the 2003 war, has the closest ties to Iran. It's the upper class of the Shiite party power structure.

The Fadhila and Sadr parties share a larger local power base, and although they are believed to have some tie to Iran, are very pro-Iraqi nationalist.

Fadhila has a stronger share of the upper working class, giving it a power base that got it elected in 2005.

The Sadr Party strength comes from "some really poor slums in Basra," said Cole.

It's "closest to the masses," said Rochdi Younsi, Middle East analyst at the business risk firm Eurasia Group, and its leader, "the Shiite Che Guevara," is rallying poor Shiites against Shiite, Sunni and U.S. adversaries throughout Iraq.

All three are to be watched as the British move their last troops. "Then we'll really be able to see … how did the politics play out on the ground, without the presence of a referee," Younsi said.

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