Investors are worried about possible attacks on oil facilities in Southern Iraq that could affect crude supplies into Asia, an analyst told CNBC on Thursday.
Iraq is the second-largest oil producer in OPEC, the Organization of the Petroleum Exporting Countries. A disruption to its output level could make it hard for the oil cartel to replace the shortfall, Henning Gloystein, director for global energy and natural resources at political risk consultancy Eurasia Group, said on “Squawk Box.”
“That southern facility is right at the heart of the geopolitical risk world at the moment,” he said referring to oil facilities in Iraq’s southern province of Basra. “This is where the oil market fears a confrontation because if that gets hit, markets will get into trouble, especially in Asia.”
Basra, which is near the Umm Qasr port, accounts for nearly 85% of Iraq’s crude oil production, according to the Associated Press.