Iraqi protesters gather outside the burning headquarters of the Iranian consulate in the southern city of Basra on September 7, 2018 during demonstrations over poor public services. Haidar MOHAMMED ALI | AFP | Getty Images

Iraq's oil-rich Basra province is being rocked by renewed violence as summer protests regain momentum, threatening oil facilities and the country's leadership.

Thousands of Iraqis have been taking to the streets daily over the last week, torching government buildings and political party offices in a show of anger against abject living conditions, government corruption and foreign influence.

The past week saw rockets fired at the U.S. consulate and Basra airport. The Iranian consulate and offices of powerful Iranian-backed Shia paramilitary groups were also set alight.

So far, at least 12 protesters have been killed and more than 200 injured by security forces, deployed against the demonstrators for the first time this year in a sign of mounting panic from the government.

As home to most of the oil production facilities for OPEC's second-largest producer, Basra in crisis could have a material impact on oil output and prices, analysts say.

It may also see Iraq's Prime Minister Haider al-Abadi pushed from power, creating even more uncertainty for the war-scarred nation and its 15-year old democracy.

"We've seen protests around facilities and threats being made against oil companies. Some companies have taken their foreign workers out," Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC.

"Production hasn't been hit yet, but if you were to have one facility go down, you could lose upwards of 700,000 to 800,000 barrels of production, so it's a big story to watch."