The Oil Will Continue to Flow

By Padraig O'Hannelly.

The Kurdistan Regional Government (KRG) has upped the ante in the continuing dispute with Baghdad over oil export revenues.

In response to what it describes as "the Iraqi federal government ... not sharing revenues in accordance with the Iraqi Constitution", the KRG has threatened to take legal action against anyone who buys oil from the State Oil Marketing Organisation (SOMO).

This follows Baghdad's earlier threat to take legal action against buyers of Kurdish crude, which is now flowing in greater volumes through the new pipeline to the Turkish port of Ceyhan; these threats appear to have frightened some potential buyers, with several tanker-loads of Kurdish crude still remaining unsold after weeks at sea.

It now seems probable that these issues will have to be resolved in the context of more autonomous or even fully independent Kurdistan, which many expect to follow a planned referendum in the region.

In the meantime, it seems unlikely that the potential for courtroom battles will stop the flow of oil from either Kurdistan or Southern Iraq to where it is needed.

(Flag image via Shutterstock)

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