Iraq is stuck in a purgatory of caretaker governance ā€” unable to make strategic decisions in the oil sector and beyond ā€” as political leaders in Baghdad escalate their 10-month power struggles over government formation into a new phase of street protests and civil unrest.

The most volatile rift is the intra-Shia division between the political movement led by cleric Muqtada al-Sadr and a collection of largely Iran-backed parties united under the banner of the Coordination Framework. But oil sector issues are also playing a key role in the political dynamics, and the oil sector is suffering from Baghdad’s dysfunction.