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Over the New Year holiday,pro-Iran militiamensurrounded the United States embassy in Baghdad. Ultimately, and thankfully, the American personnel remained unscathed, but it was a further reminder of the political unrest that continues to dominate that country. It also reminds us of the potential disruption that more unrest in Iraq could impact global oil markets.

TOPSHOT - A handout picture received from the US embassy in Iraq on December 31, 2019, shows a US ... [+] army apache helicopter dropping flares over Baghdad's high-security Green Zone on December 31, 2019, after Iraqi supporters of pro-Iran factions breached the outer wall of the US embassy over weekend air strikes that killed pro-Iran fighters in western Iraq. - The US State Department said that embassy personnel are safe and there are no plans to evacuate, after Iraqi supporters of pro-Iran factions attacked the compound. It is the first time in years that protesters have been able to reach the building, sheltered behind a series of checkpoints in the high-security Green Zone. (Photo by - / US EMBASSY IN IRAQ / AFP) (Photo by -/US EMBASSY IN IRAQ/AFP via Getty Images)

In recent months, Iraq has experienced large-scale protests by citizens who oppose Iranian interference in their country. The country also saw themurderofhundredsof theseprotestors. Earlier this week, the U.S.struck targetsin Iraq and Syria that were linked to Iran-backed militias.

This political unrest brings with it a potential for a real disruption to the global energy markets. In 2018, Iraq produced more oil than all but four other countries. Though reliable and updated numbers are not yet available, its oil production increase in 2019 and it is probably now the fourth largest oil producer in the world. This past summer, it produced4.88million barrels per day. But just this past week, on December 28 and 29, protestors were able toshut downan oil field that produces 90,000 barrels per day.

Iraqi oil has been less than reliable on the global market forsome time. Until recently, ISIS controlled some of the countrys oil. In the last 17 years there were also disruptions due to the military engagements caused by the U.S. invasion, conflicts between the Iraqi government and the Kurdish authorities and efforts to rebuild the countrys oil infrastructure after Saddam Husseins regime and then war. In the 1990s, international sanctions and the United Nations Oil For Food program limited the sale of Iraqi oil. In the 1980s, Iraq engaged in an eight-year war with Iran that disrupted oil production and exports.

However, lately Iraq has been producing and exporting record amounts. It typicallyoverproducesits OPEC quota. If the situation in Iraq deteriorates further in 2020, we could see real disruptions to the oil market that last more than just a couple of days, which could scare the market.

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Unrest In Iraq Reminds Us Of Geopolitical Risks To Oil - Forbes