A series of drone attacks targeting Iraq’s oil industry have exposed significant vulnerabilities within the country’s security apparatus amid escalating regional tensions following the killing of Ayatollah Ali Khamenei by the United States and Israel. The strikes began shortly after the 19 June assassination and have focused on key energy infrastructure around Basra in southern Iraq, damaging oilfields, cargo terminals, and compounds housing foreign companies servicing the sector.

On 6 March, drones struck a compound hosting offices and warehouses for U.S. firms Halliburton and KBR, sparking a large fire visible from afar. Subsequent attacks included an incident on 11 March when an Iranian drone boat targeted two oil tankers at the port of Basra, setting them ablaze and killing at least one crew member. While Iran claimed responsibility for the tanker attack, no group has officially claimed the other strikes.

Iraqi officials have suggested that many of the attacks were carried out domestically by Iran-backed Shia militias, particularly factions within the Islamic Resistance in Iraq (IRI) and the Popular Mobilisation Units (PMU). These paramilitary groups, formed after the 2003 U.S. invasion and later consolidated to combat Islamic State militants, enjoy substantial independence despite being nominally under government control. Some factions pursue economic interests tied to state contracts, while others are ideologically aligned with Iran’s objectives of opposing Israel and expelling U.S. forces from the region.

The attacks have led to a steep decline in oil production in Basra, with output reportedly dropping by two-thirds and exports nearly halted. The resulting economic disruption and damage to infrastructure—paid for largely by Iraq—has prompted frustration among government officials who blame militia actions for undermining Iraq’s sovereignty and stability. Senior figures pointed to sophisticated intelligence leaks that aided the precision of the strikes.

This surge in violence comes amid a broader regional conflict ignited by the deaths of Khamenei and subsequent hostilities between U.S., Israeli, and Iranian forces. Iraqi Prime Minister Ali al-Zaidi has attempted to quell militia power by ordering groups to disarm and integrate into state forces by the end of September, a move aligned with U.S. aims to curb Iranian influence. However, hardline militias have resisted disarmament, pledging to continue operations as long as foreign troops and Israeli air activity remain in Iraq.

The escalating conflict has laid bare Iraq’s internal divisions and fragile governance. While the country’s majority Shia population ostensibly supports a unified government, multiple armed factions pursue divergent agendas, challenging state authority. Iraqi officials express a sense of powerlessness as their territory becomes a battleground in a regional war not of their making.

A government adviser acknowledged the complexity of the situation, noting that prior efforts to moderate militia involvement were disrupted by the assassination of Khamenei. He described the current environment as a religious and existential struggle for many Shia militias, with Iraq caught between competing Iranian and Western interests. He also warned of limited defensive capacity against potential Iranian retaliation, underscoring the precarious security situation.

As the war between Israel, the United States, and Iran intensifies, Iraq’s oil sector remains under sustained threat, highlighting the country’s ongoing struggle to maintain sovereignty and economic stability amid the entangled dynamics of regional conflict.