Political risk for investors in Iraq’s oil sector has ratched up in the wake of the 23 December arrest of bodyguards belonging to Finance Minister Rafi al-‘Issawi. The arrests prompted a wave of demonstrations against Iraqi Prime Minister Nuri al-Maliki. The protesters, who numbered as much as 160,000 on 26 December following Friday prayer and who hailed from Sunni-majority towns of Ramadi and Fallujah, feared a repeat of last year’s crackdown and arrest warrant for Iraqi Vice-President, Tariq al-Hashimi.

Mr ‘Issawi, like Mr Hashimi, is a member of the ‘Iraqiya coalition. A respected and popular politician, Mr ‘Issawi served as a surgeon in his home town of Fallujah during the 2004 siege by US forces. Last year’s move against Mr Hashimi resulted in Mr Maliki essentially strengthened his position by undermining ‘Iraqiya-led opposition. But, the ‘Issawi arrests appear to have backfired and could galvanise his opponents to unite. Furthermore, the arrests have clearly alarmed Washington – US President Barack Obama reportedly telephoned Mr ‘Issawi on 23 December in a clear gesture of support. (CONTINUED - 313 WORDS)