Future Uncertain for Baghdad-Erbil Oil Deal

Earlier, on Nov. 17, Iraq’s oil minister had denied during a parliamentary meeting that the deal was conceived as paying the KRG for giving the oil under its control to the central government.

But that appears to be how the deal is perceived among its critics.

Saad al-Mutalebi, a member of the Shiite State of Law Coalition and a politician close to former Prime Minister Nouri al-Maliki, described the deal as “unrealistic.”

“[The deal] will cause problems larger than those that exist at the moment,” Mutalebi told Al-Monitor. He has been a vocal proponent for greater powers for the Iraqi government versus the KRG. “The agreement is that the KRG allows the government of Iraq to export Kirkuk oil and … the oil in Kirkuk belongs to the federal government.”

When the Islamic State (IS) swept through large parts of northern and western Iraq in June, the Kurdish peshmerga forces brought Kirkuk under their firm control as Iraqi army units deserted their posts there, fearing an IS onslaught. Ever since, oil exports from Kirkuk to the Turkish port city of Ceyhan have stopped, causing the Iraqi government a significant loss of revenue while it is locked in a brutal conflict with IS.

The KRG says it now produces around 300,000 barrels of oil per day. Past oil figures from the authorities show that before June the Kirkuk oil fields exported between 300,000 to almost half a million barrels of oil per day, depending on the technical capabilities and readiness.

Mutalebi’s view is shared by many in Baghdad. During a parliamentary session on Nov. 17 where Abdul-Mahdi tried to convince the lawmakers about his deal with the KRG, he faced harsh criticism, particularly from pro-Maliki lawmakers.