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Iraq's post-election stand-off deepens after recount call

Baghdad (Platts)--8 Jun 2018 1118 am EDT/1518 GMT


The prospects of a fresh political crisis in OPEC's number two oil producer rose this week after Iraq's election commission announced it will appeal parliament's call for a manual recount of the country's fourth national elections since the fall of Saddam Hussein.

S&P Global Platts survey: OPEC May crude oil output slides to 13-month low of 31.90 mil b/d

Iraq's parliament on Wednesday amended the law that governed the disputed May 12 election, pushing the country from typical short-term political instability toward a potential constitutional crisis and new oil sector delays.

The move invalidated out-of-country and most internally displaced votes, called for a manual recount of the remaining votes, and replaced the entire leadership of the electoral commission with a nine-member judge panel.

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Iraq's Supreme Judicial Council on Thursday began taking over offices at the election commission, but the real test will be the reaction of the political parties that performed the best -- or better than expected -- and thus have the most to lose.

"This issue is not an easy one and we expect it'll change many results. We need to find out what happened," MP Farid al-Ibrahimi, a member of the State of Law electoral list allied to former prime minister Nouri al-Maliki, told S&P Global Platts.

Calls for a recount have been mounting since the election was held amid multiple charges of electoral fraud from both Baghdad and minorities in Iraqi Kurdistan. Prime Minister Haider al-Abadi has claimed the elections were marred by serious "violations and serious fraud."


OIL SECTOR DELAYS


In a statement Thursday, however, the election commission said it will "use its constitutional and legal right to challenge the amendment of the election law (allowing the recount)...because it contains a number of irregularities."

Iraq's two previous national elections led to delays in forming a government - and in 2016 half the cabinet was replaced, including the oil minister. This has, in the past, led to a slowdown in decision making, such as oil field sub-contract approvals, out of a confusion over legal authority and fears of politically motivated accusations of corruption.

One factor in its favor is that oil minister Jabbar al-Luaibi, a veteran of the oil sector in Iraq before taking the job in 2016, won a seat in the next parliament with wide support in Basra, the capital of Iraq's oil sector.

The oil sector in OPEC's second-largest producer is remarkably resistant to obstacles - from the war with Iran to international sanctions to the US invasion and subsequent civil war to the self-proclaimed Islamic State incursion - and the country now produces and exports oil at record levels, which is necessary because of its dependency on oil revenues.

Indeed, the dozens of oil contracts finalized since 2009 are evidence of upside to oil investors willing to stomach the political uncertainty.

--Staff Reports, newsdesk@spglobal.com
--Edited by Jonathan Fox, newsdesk@spglobal.com




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