Over the weekend, two blasts on the Iraq-Turkey oil pipeline closed the key northern export route costing the struggling economy around $7 million per day. The pipeline had only last week resumed pumping for the first time since the US invaded Iraq in March and it could be another two weeks before the pipeline was working again.
An international security company has now been awarded a contract for 6,500 guards to ensure no further damage is done to the main oil pipeline to Turkey. The new recruits will be in addition to the 5,000 Iraqis already protecting the 600-mile structure.
Iraqi's oil industry is supposed to play a crucial part in financing the reconstruction of the country, but attacks over recent days have put a question mark over those plans.
The violence in the Nigerian city of Warri is the most serious since March, when an ethnic Ijaw rebellion forced oil majors to evacuate key installations and shut down 40% of the Nigerian oil output.
The latest cycle of unrest could delay plans by Royal Dutch/Shell, Nigeria's biggest producer, and ChevronTexaco to restart some facilities abandoned after the clashes five months ago.
The government has imposed a curfew in the town following three days of gun battles which resulted in the deaths of 10 people.
Underlining the production problem is the continuing fall in US gasoline reserves which fell by 3.7 million barrels in the week ended Aug. 1 to 198.1 million barrels, the lowest since November, while gasoline demand is 1.9 percent higher than a year ago.
