Oil Dispute: Agreeing to Disagree, for now

By Mushreq Abbas for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Have Baghdad and Ankara agreed to resolve the Kurdish oil issue? Has Baghdad agreed with Erbil to settle the dispute that broke out after the latter concluded a contract to independently export its oil to world markets? Or has it not? The reality on the ground does not indicate that there is a real agreement on settlement, but rather shows that things are left pending, perhaps until the elections are over, making the only agreement on the absence of an agreement.

A prominent Iraqi politician who is close to the decision-making sources in Baghdad spoke of this vision to Al-Monitor and tackled the consequences of the crisis that began with the announcement of the visit of the Kurdistan Regional Government Prime Minister Nechirvan Barzani on Nov. 27 to sign contracts to ship oil from the region to Turkey via a pipeline that has been established for this purpose.

He also addressed the wide range of reactions in the Iraqi government, which rejected the agreement and deemed it to be unconstitutional.

On Nov. 28 the Iraqi Oil Ministry confirmed to Al-Monitor through Laith Shahir, Director of the Legal Department of the Ministry of Oil, that “the Oil Ministry has informed the Ministry of Natural Resources in the Kurdistan region of the illegality of its oil agreement with Turkey, which was concluded without referring to the Ministry of Oil.”

“The clarification sent to the Kurdistan region confirmed that any oil deal would be unconstitutional and noncompliant with the Budget Law and the Financial Administration Law,” he added.

Deputy Prime Minister for Energy Hussein al-Shahristani announced, “The government is entrusted with the wealth of the country and cannot remain silent when the Kurdistan region[‘s] oil is being exported without its consent.”

For its part, the Kurdistan region confirmed that the contracts are constitutional and that Shahristani cannot intervene to determine the policy of the region’s oil.

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