The Iraqi Cabinet announced Aug. 12 that it has approved a regulation by the Ministry of Labor requiring that 50% of foreign oil company employees working in the country be Iraqis. The move followed mass demonstrations in Basra calling for better public services, including clean water and working and reliable electricity, and job opportunities for the unemployed in the city. Iraq's largest oil reserves lie beneath Basra province.

Basra Governor Assaad al-Eidani had on July 31 announced that an agreement had been concluded with the foreign oil companies to secure job opportunities for Basra residents. Days earlier, the Associated Press reported Deputy Governor Dhirgham al-Ajwadi saying that the unemployment rate in Basra, population 4 million, had risen sharply to at least 30%.

On July 13, demonstrators had stormed the headquarters of the Russian oil company LUKOIL at Basra's West Qurna 2 field, one of the largest, leading workers to pack their belongings. A number of them were evacuated by helicopter.

According to Hamza al-Jawahiri, an oil expert at the Ministry of Oil, “[The new regulation] imposes more restrictions on oil companies, which are already voicing concerns [about workers' skills and experience] and have faced tribal threats since 2003.”