Massive Oil Plunder by Iraqi Shiite Militias Evolves as Major Menace to US troops

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Iraqi PM announced Tuesday, May 30, he would be flying to the southern Iraqi town of Basra Wednesday to tackle the crisis posed by “oil gangs.” Simultaneously, 1,500 American reserve troops were moved from Kuwait into Iraq.
debkafile reveals: The two moves were prompted by the same high-stakes crisis which now looms large over US-led forces and Iraqi government, and is the cause of plummeting security in the oil town of Basra: the outrageous scale of oil piracy by Shiite militias.
Al Maliki knows perfectly well that the “oil gangs” belong to the militias run by the two main Shiite parties in government. That is why no Iraqi military or security force is capable of contending with them. Their criminal operation has spread from the Shiite south to the northern oil fields, further cutting into national oil revenues and boosting the menace to US troops. The Iraqi prime minister also knows that the most grueling test of his ability to hold the Iraqi government together faces him now in Basra. It depends on his success in reining in the dangerous oil banditry first uncovered by DEBKA-Net-Weekly 254 of May 19:
A group of US ex-generals, veterans of the three-year Iraq conflict, returned to Washington in late April from a three-week fact-finding trip to the embattled country with an encouraging diagnosis: “The war is still winnable,” they said in an otherwise mixed report.
They suggested that a situation will develop at the end of 2008 when “we will be able to accomplish more with less manpower.” They therefore recommend gradually downsizing the American army in Iraq over the next two years by some 55,000 men, leaving no more than 80,000 at the end of 2008.
But winning the war, they warn, depends on a further outlay of $4-5 billion to improve the living standards of the civilian population. The generals, given to understand that appropriations on this scale were unavailable from US sources, brought back some disturbing discoveries about the prospects of Iraqi self-help from its own oil revenues.
They found that most Shiite officers and men do not rely on the Iraqi defense ministry or even their political masters for the bulk of their income or logistical requirements. Their source of funds is dryly described as “Illegal trading in oil.”
This is a gross understatement. The Shiite militias have developed a roaring trade in oil pirated from Iraqi oilfields and its transport up to Iraq’s borders with Syria, Jordan, Kuwait, Saudi Arabia and Iran. There, it is flogged to waiting gangs of oil smugglers. The plunder is large-scale – between 20% and 30% of Iraq’s entire output.
Despite strenuous measures to put a stop to it, the scale of the brigandage has increased; the Shiite militias have developed a network for the organized disposal of stolen crude from all of Iraq’s oil fields.
As a result –
1. Shiite militiamen spend more time and energy on their nefarious oil trafficking than on fighting.
2. Their links with the smugglers’ rings run two ways. To corner the market, the Shiite militias have agreed to act as the main channel for smuggled arms to reach Sunni and Baathist insurgents and al Qaeda’s contingents in Iraq. The more weapons they carry to these end-users, the more “hot” oil the smugglers are willing to push across the borders.
DEBKA-Net-Weekly‘s military sources in Iraq report that the generals who compiled this report for the Bush administration completed their work in April. Little did they know that one of their key predictions was about to come true. They pointed out that the two-way routes used in the wholesale piracy of Iraq’s primary national resource, oil, would become the most dangerous threat to American troops from the beginning of summer up to the end of the 2006.
During those months, quantities of sophisticated weapons would be dropped in the hands of the Iraqi insurgents and terrorists, ready for mounting a massive offensive on the scale of the Vietnam War’s Tet Offensive of the seventies – between now and US mid-term elections in November. No wonder, the Iraqi prime minister is in such a hurry to try his hand at putting a stop to this egregious two-trade.