Iraq's southern oil flow recovers after bomb blast

By Randy Fabi

BAGHDAD (Reuters) - Iraqi oil exports returned to normal in Basra on Friday after a bomb attack a day earlier, but heavy fighting throughout the region has sparked unease about the security of the southern oilfields and pipelines.

Saboteurs attacked Basra's oil pipeline system on Thursday, briefly interrupting exports from the south of the country for the first time since 2004.

"As of 10 p.m. (3:00 p.m. EDT) last night, things are back to normal," a senior Iraqi oil official told Reuters on condition of anonymity.

A four-day-old Iraqi army crackdown on Shi'ite cleric Moqtada al-Sadr's Mehdi Army in Basra, Iraq's second city and its gateway to the Gulf, has ignited clashes across the south and has kept the oil industry on edge.

"The southern pipeline is very long and always a target. But destroying the pipeline helps no one," the oil official said.

About three quarters of Iraq's exports flow from the south of the country, which has largely escaped the persistent problems affecting shipments from the north.

Militant groups and the federal government are battling for control of the region's oil wealth, which makes up the bulk of government revenues.

Whether or not oil flows are interrupted, the fighting could impact supplies because it has made traveling to the oilfields and facilities harder, a South Oil Company official said.