New report (15 June 2004), that al qaeda's global guerrillas have hit pipelines to a major oil storage facility in Basra. Oil production was halted.
The main oil pipeline, that carries 50,000 barrels per hour was sabotaged. Oil workers shifted the flow to the back-up pipeline. However, that pipeline was only able to withstand a flow of 30,000 barrels and hour and was damaged as a result (this is an example of the network attacking itself). The current story is that this second pipeline was sabotaged too. The main pipeline will take weeks to fix due to large pools of burning oil. The smaller pipeline will take several days.
Retail value of the oil not shipped over 10 days is $600 m. The previous major attack on a Basra pipeline took two weeks to fix and resulted in a loss of 9 m barrels or a loss of $315 m (retail value). This recent attack will likely treble the $200 m in lost revenues suffered by the Iraqi government due to sabotage attacks over the last year.
All Iraqi oil exports are accomplished via the Basra terminal. The northern pipeline to Turkey has been mostly inoperative due to ongoing attacks. In a related attack, the top security official of Iraq's northern oil company was assassinated. This attack will serve to support oil prices at their current levels despite a general downward trend due to increased Saudi production.