Iraq's Abdul Mahdi Named Premier Amid U.S.-Iran Tensions

(Bloomberg) -- Iraq's Adel Abdul Mahdi, a former oil minister, was picked by the country's newly elected president to head the government of OPEC's second-biggest producer.

Abdul Mahdi, an economist who also served as finance minister and vice president in previous administrations, was nominated by President Barham Salih on Tuesday, al-Sumaria News reported. Earlier in the day, Salih -- a Kurdish politician -- was elected to the largely ceremonial post of president by Iraq's parliament.

Iraqi leaders have struggled to form a government since inconclusive elections in May, and the new premier will take over amid a wave of unrest over corruption and poor services. Deadly protests last month in the oil-rich southern province of Basra left some government offices and the Iranian consulate burned to the ground.

Iraq is also a political battleground in the escalating contest between the U.S. and Iran, whose focal point is the civil war in neighboring Syria. Like Iran, Iraq has supported President Bashar al-Assad's government.

The U.S., which invaded Iraq in 2003 to overthrow Saddam Hussein, backed outgoing premier Haider al-Abadi in his fight to recapture territory from Islamic State. But Abadi's bloc slipped to third place in the election, which was won by a group associated with firebrand Shiite cleric Moqtada al-Sadr. Iran has also triggered a backlash among Iraqi nationalists like al-Sadr by seeking to influence its smaller neighbor.

The tensions haven't hurt the oil industry. In September Iraq exported more than 4 million barrels a day for the second consecutive month, as buyers sought alternative supplies to Iran ahead of U.S. sanctions.

Abdul Mahdi has 30 days to form a new cabinet, according to the constitution.

To contact the reporter on this story: Zaid Sabah in Washington at zalhamid@bloomberg.net

To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Ben Holland