Prime Minister Maliki, who is in midst of negotiating a government in aftermath of the recent Iraqi elections, has asked for US support including airstrikes. The last thing we should do now is further imbed ourselves with Maliki. This is the shortsighted view that got us where we are now. It will be a tragic mess for a while, but the sizeable and powerful block of Sunnis who have been disenfranchised by the Maliki and now are taking up arms, will create new facts on the ground. ISIS is not a long-term threat in Iraq. Ultimately, Iraqis will kill ISIS. However, first the Iraqis have to sort themselves. The de facto partition of Iraq is now likely.

(It is worth recalling that under Saddam’s largely Sunni government, religion was kept out of government. Whatever its other problems, it was a strictly secular government.  Saddam said emphatically in debriefings that we should keep “the Turbans” out of government.)

Given where we are, this will not be quick or clean. The Kurds will now take undisputed control of Kirkuk (long the object of their intentions). They will protect their new border while the south may effectively become its own Shia enclave with a tentative relationship with Iran. As for the rest, and control of Baghdad, it will be ugly. Watch Maliki’s investments and family.   I bet they are going to moving out of Iraq swiftly—with good reason.

On the financial front, watch how this interacts with the upcoming Iran nuclear negotiations due to complete July 20.  Oil deliveries from southern Iraq are at risk.  Iran will play a role in supporting the Shia and Maliki in Iraq.  If Washington does align itself with Maliki and de facto, Iran, in the Iraq battle, Gulf states will be even more angry with Washington. Volatility in oil markets is going to be up for a while.