KRG Risks Isolation by Exporting Oil

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

KRG Risks Isolation in Iraq by Exporting Oil through Turkey

The announcement this month that the Kurdistan Regional Government (KRG) was exporting oil independently of the Iraqi central government was an attempt to impose a new reality on the ground before proceeding with negotiations on the formation of a new Iraqi government.

This move, however, will have an impact on the negotiations that goes beyond relations between Baghdad and Erbil. It not only annoyed Prime Minister Nouri al-Maliki — who described the move as an operation to steal oil — but it also had a negative effect among some of the forces that have good relations with the Kurds.

Suhad al-Obeidi, a member of parliament in the Mutahidoun bloc, which is led by parliament Speaker Osama al-Nujaifi, said that no one can accept the unilateral export of oil by the Kurdistan Region of Iraq. It seems that a number of Sunni politicians, especially those representing disputed areas between Erbil and Baghdad such as Kirkuk, were put in an awkward position because the Kurds raised the ceiling of their demands and acted unilaterally. Some of these politicians told Al-Monitor that the Kurdish step came as a surprise and confused most of the Iraqi political forces.

This is especially true since it was followed by statements from Arif Tayfour, a Kurdish leader and deputy speaker of parliament, calling for the annexation of the Kirkuk province to Iraqi Kurdistan, after the elections proved that the Kurds, who received a majority of parliamentary seats in the province, maintain a demographic majority in Kirkuk.

Kurdish officials believe that the Maliki government did not adhere to the promises made to them when the current government was formed under the Erbil Agreement in April 2012. They feel the government has taken hard-line stances toward their demands, represented in recent months by halting payment of the Kurdistan region's budget due to disputes between the two sides over oil policies and contracts the region signed with international oil companies without consulting the Iraqi government.

One Response to KRG Risks Isolation by Exporting Oil

  1. Cristiano Ronaldo 3rd June 2014 at 17:35 #

    Iraqs most precious resources are water and oil. The confict with the kurds is naive and very closed to high incompetence.
    To force the kurds to submission is a very difficult and expensive game. The issue is becoming more and more an "ego/chauvinist" problem.
    What could happens to the kurds when Baghdad cut the salaries of ALL public functions? A collapse of the kurdish society? Of course, when import/exports in Kurdistan decreases by 50%, all public servants do not get their salaries for more than 3 months, which alternatives do the kurds have? Total submission or fight for an alternative solution.
    Imagine what happens in Europe when they had a financial crisis in Greece or the result of decreasing their GDP by 25% in one single year. Or think what happened to the USA when the Public Sector were about to be fired since there was no budget, nor money for the public functions. All those citizens in USA and Europe perceived those situations as a major crisis threatening their existence.
    And the kurds by those measures have been more resilient and are getting their act together by visiting foreign countries, finding buyers for iraqi oil (from Kuristan) at higher prices that SOMO ever fixed.
    Getting reassurances from France, Germany, Italy, UK and Turkey (all NATO members) that they will buy the iraqi oil from Kurdistan. And what does the central government in Baghdad? Nothing or rather looking at their navels and fat bellies?
    To foment iraqi resistance against Baghdad is a very bad move for Iraq. To destroy all sorts of bridges to etnical minorities is even worse.
    Is there any decent politician or reliigous leader with common sense who can save Iraq from division, split and internal war? Speak up now because the time is becoming more and more scarce.
    The problem of potable, drinking water in Bagdad and Basra which is far more expensive than the finest Basra Light Oil is scaring more than the oil dispute with the kurds.
    Iraq is very much depending on the good faith and goodwill from Turkey, Iran, Syria and the North of Iraq or Kurdistan for having drinking water for the population. If things continue as it seems then 30-50% of the water coming from the main rivers will decrease or consumed "up North". Why is not Baghdad building desalinitation plants in Basra, like they do in Kuwait? Are we still counting with "free lunches" for all years to come in terms of good hearted neighbors to give us our drinking water? Is that the reason why we give the neighbouring countries bad names? Just to make sure that we pissed them off?
    Therefore I believe that this "ego/chauvinist" approach will cause very serious problems to Iraq or until some decent poitician with common sense appears.