Reuters reported that both ExxonMobil Corporation (ticker: XOM) and Chevron Corporation (ticker: CVX) evacuated their staffs from Iraqi Kurdistan this morning. The employees of the oil giants join several thousand civilians attempting to escape violent Islamic State terrorists, also known as ISIS, who are now within a 30 minute drive of Abril, the Kurdish regional capitol.
On June 13, Rupert Coleville, spokesman for the U.N. rights chief, said that “The full extent of civilian casualties is not yet known, but reports received by UNAMI, the U.N. Mission in Iraq to this point suggest the number of people killed in recent days may run into the hundreds, and the number of wounded is said to be approaching 1,000.” According to a UN Iraq report from August 1, there are over 1.2 million internally displaced people in Iraq because of ISIS.
A spokesman for Exxon in Houston said the company does not comment on security matters.
This continuing attacks by ISIS endangers the approximately $10 billion Kurdistan gained in investments into its energy sector mid-July when they signed 50 production-sharing agreements with various oil and gas companies, including Exxon, Chevron, Total (ticker: TOT) and Gazprom.
Kurdistan is unlikely to receive support against the radicals from Iraq. Relations from the countries are historically strained, as shown last week in a verbal battle over the rights to a large oil and gas tanker, as reported by the Wall Street Journal. Iraq itself is struggling to fend off the ISIS attack.
Although the price of oil has been mostly unaffected by the ongoing attacks in Iraq, that is likely to change if ISIS influence continues to expand. Ole Hansen, vice-president and head of commodity strategy at Saxo Bank, said prices per barrel could spike as much as $20 per barrel in a worst case scenario, i.e. Iraq returning to Gulf War levels.
ABC News reports that analysts estimate ISIS currently makes $1 million a day selling the oil they have captured, and the number could get as high as $3 million a day if they seize the Shaar gas field. They have been selling the oil for $30 a barrel on the black market. The international price standards for oil is over $100 a barrel.
An unnamed U.S. official told CNN that the Obama administration might be considering air strikes against the ISIS terrorists. White House spokesman John Earnest said that no U.S. military solution exists for Iraq.
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