The Battle for Iraqi Oil: Can There Ever be a Winner?

The battle for Iraq’s oil goes on. Iraqi Kurdistan is intent on controlling its own oil, Baghdad is intent on wresting that control from them. Will the impasse ever be solved? Only if both sides see reason, one commentator argues in this article from NIQASH.

Ever since oil was found in Iraq nearly a century ago, there has been a battle to control the most important commodity the country has known. In the beginning, the struggle over oil played out between foreign or colonial powers. Then when the Iraqi oil industry was finally nationalised in the early 1970s, the struggle for control of the oil industry became internal. Today it dominates domestic politics.

Ever since the government of the semi-autonomous region of Iraqi Kurdistan, in the north of the country, decided to come up with its own version of oil and gas laws in 2006 and 2007, the Kurdish and the Iraqi federal government in Baghdad have been on a collision course.

The Kurdish formulated their own laws because they were largely frustrated by the federal government’s inability to come up with such a law and to start to develop the oil industry. Iraqi Kurdistan then began to negotiate contracts with international oil companies and to move on without Baghdad’s explicit approval.

Since then the powers-that-be have been deadlocked, with neither side willing to compromise. Baghdad is refusing to recognise contracts made by the Kurdish region and threatens to blacklist international companies operating there. In return the Kurdish halted oil exports from out of their region.

In fact, it is only relatively recently that the Kurds have been able to control the oil under their own feet – and it is hard to imagine they would ever give up those rights, especially now that huge companies like Exxon Mobil and other major oil companies are lining up to do business in the region.

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