Irrespective of the potential for the Iranian gas, the KRG gas deal increases Russia’s importance as an exporter of gas to Turkey & Europe which currently import over 55% and 35% respectively of their gas from Russia which is likely going to increase meaningfully going forward. It’s ironic that Russia would control the infrastructure that could provide Europe and Turkey with non-Russian gas, which was supposed to increase their energy security and lessen their dependence on Russian gas.
The combination of the gas and oil deals will provide Russia with a strong voice and influence on the KRG and its future, but it is now likely that this influence will not be what the KRG was hoping for. More likely is that there will be a strong Russian voice in shaping the future relationship between the KRG and the Federal Government of Iraq (FGI) which implies that Russia would have a major seat in the future negotiations over disputed territories in addition to the US and Europe.
Given Russia’s revived leading role and strengthening relationships in the Middle East it would imply that it would use its position with the KRG to ensure that it remains with a federal Iraq, a very different approach to its previously ambivalent stance towards an independent KRI.
Ahmed Tabaqchali is the CIO of Asia Frontier Capital (AFC) Iraq Fund and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets.
Disclaimer: Ahmed Tabaqchali’s comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.