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Crude Rises On News ISIS Has Entered One Of Baghdad's Suburbs

Just like the German-economy crushing Ukraine civil war, which promptly faded into obscurity, so the mainstream appears to have bored quickly with the recent developments surrounding ISIS, with conventional wisdom inexplicably convinced that US airstrikes have managed to stop the Al-Qaeda 2.0 menace dead in its tracks. Nothing could be further from the truth.

But while the western world could care less about the fate of some backwater town on the border between Syria and Turkey, it certainly cares about what happens to the Iraqi oilfields located south of Baghdad (which serve to determine the marginal price of oil around the world). Well, the world may not care, but crude traders certainly do, and the reason why oil appears to be rising in recent trade...

... is due to news that ISIS militants have infiltrated one of Baghdad's outer suburbs, Abu Ghraib which is only eight miles from the runway perimeter of Baghdad's international airport.

CBS reports that the arrival of ISIS is cause for serious concern now that the Iraqi Defense Ministry has confirmed ISIS has MANPADs, shoulder fired anti-aircraft missiles.

The Iraqi army is still patrolling Abu Ghraib, but they play cat and mouse with the ISIS fighters who stage hit and run attacks on security forces.

 

 

It's a mixed picture around the city. ISIS took over the city of Fallujah -- only about 40 miles west of Baghdad -- in January, and the Iraqi security forces have fought in vain for a year to force them out.

As noted above, in the latest embarrassment for Obama, instead, and in spite of weeks of U.S.-led airstrikes, ISIS has gradually extended its reach. The extremist group is now either present or in control of a huge swath of countryside, forming a 180-degree arc around the Iraqi capital from due north around to the west, and all the way to the south. Around this zone there have been skirmishes, and occasionally heavy fighting, with Iraqi security forces and Shiite militias battling ISIS.

If ISIS has indeed arrived, it is likely that things will rapidly move from here, as Baghdad contains numerous ISIS sleeper cells that carry out almost daily bombings and assassinations.

An Iraqi officer told CBS News that the airstrikes are helping to clear an ISIS-free buffer zone around the city, where there are Iraqi boots on the ground. In fact, there are 60,000 men assigned to defend the capital, and CBS News correspondent David Martin reports that there are 12 teams of American advisers deployed with the Iraqi brigades.

LOL "advisers." The same advisers who estimate that the Iraqi army will fight for the capital and there is no real concern that Baghdad is in imminent danger.  Alas, any bets that the Iraq army can do anything do oppose ISIS can only generate deep laughter: "as at least three major Iraqi military debacles have shown over the past five months -- the most stunning being the quick fall of Mosul in the north -- the army is plagued with problems of poor leadership and endemic corruption that undermine their effectiveness as a fighting force."

As Martin reported from the Pentagon on Thursday, due to the relatively poor performance of the Iraqi troops west of Baghdad, the airstrikes are having a limited impact.

For those who have lost the plot line by this point, here is a summary: the US is blaming the army that the US spent billions to equip and tradin for being unable to defend against a jihadist force that the US spent billions to equip and train.

Meanwhile, the US is closer and closer to losing the laughable "adivser" moniker, and calling the local boots on the ground for what they are. It got that much closer to doing that over the weekend when the US used Apache attack helicopters -- for the first time in the fight against ISIS -- in Anbar province on Sunday.

Last week, the fighting in Anbar verged on a rout of the Iraqi army, Martin reports. In the past few days the ISIS offensive has slowed, but analysts aren't sure if that's because ISIS is overextended or are simply taking an "operational pause" while they reposition for the resumption of the offensive. Judging by the sudden renaissance of oil, at least it is clear what crude traders are thinking right about now.