OPINION: Iraq’s oil industry is braced for continued misery after Prime Minister-designate Mohammed Allawi threw in the towel on forming a new Cabinet, deepening a power vacuum that has plagued the country for months, writes Nassir Shirkahni.

Allawi quit his mandate after failing to secure parliamentary support for a Cabinet selection aimed at appeasing protesters pressing for the overhaul of a political system steeped in endemic corruption and economic mismanagement.

“If I agreed to offer concessions, I would be prime minister now, but I tried everything possible to save the country from sliding towards the unknown and resolve the current crisis. But the negotiations hit repeated snags,” Allawi said this week.

To make matters worse, acting Prime Minister Adel Abdul Mahdi also decided to stand down from most of his duties and called for early elections to break the deadlock.

Allawi was plucked from obscurity a month ago to form a Cabinet of technocrats focused on ending widespread protests that have hindered investments by international oil companies.

More than 450 unarmed protesters have been killed by security forces and unidentified gunmen during the unrest.

There are increasing fears that the deepening political paralysis could be exploited by militants of the so-called Islamic State bent on tearing apart a country long blighted by sectarianism.

The power vacuum, unless it is filled quickly, thus throws into serious doubt major energy projects needed to sustain Iraq’s position as the second most important Opec producer.

(This is an Upstream opinion article.)