Military response to Paris attack may cause oil production disruption for Iraq

The deadly terrorist attack on Paris, led by IS militants, has a little to do with global oil market. However, experts have noted that West’s military response to IS militants can put a quarter of Iraq’s supply in the line of fire.
Analysts at Raymond James (RayJa) said that the conflict with IS militants in recent times has negligible impact over oil economy. The majority of oil production – between 1 million and 4 million barrels per day – is located far south of the fighting. Airstrikes were highly tactful, and the supply was not hampered.
Now, the scenario may change. As West is looking to increase firepower, oil infrastructure of Iraq may acquire significant damages.
According to analysts, “The only scenario we can envision that could cause disruptions is an all-out ground assault against IS-controlled territory. Such a war would not deliberately target oilfields that are in friendly hands, but – as had been the case during the 2003 invasion of Iraq and the 2011 war in Libya – all-out combat tends to leave collateral damage when it comes to oil industry infrastructure.”
At Tudor, Pickering, Holt & Co., analysts told investors the Paris attacks could add brick to the oil demand “wall of worry.”
As for supply, TPH said escalating volatility in the Middle East does “raise the disruption risk and/or the potential for OPEC to change behaviour”