Iraq and Kurdistan Must Face Each Other as Oil Standoff Becomes Regional

What’s Going On?

Following the construction of Turkish pipeline connecting Kurdistan to the Turkish city of Ceyhan, Baghdad has cracked down on illegal oil exportation out of Kurdistan. The Iraqi government is outraged and claims that such actions are illegal, and that any multinational companies that purchase the “pipelined” oil are complicit in the activity. The Iraqis have hired international attorneys to identify and prosecute any oil company that has purchased Kurdish oil siphoned out of the Turkish pipeline. This action threatens not only the oil companies, but also Kurdistan, Turkey, and the entire status quo of the Kurdish oil economy.

Who are the Kurds?

Kurdistan is a semiautonomous region in the northern part of Iraq, and has been under Iraqi jurisdiction since the Treaty of Sevres established the nations of Iraq, Syria, and Kuwait in 1920. The Kurds are Sunni Muslims and have a language and culture distinct from that of the Arab nationality that inhabits the majority of Iraq. In addition to Iraq, the Kurdish nationality has a significant presence in Turkey, Syria, and Iran.

The Iraq- Kurdistan relationship has long been fraught with ethnic and nationalistic tension between the Iraqi Kurds and Arabs, and the Kurds have consistently desired statehood, forming political parties and rebelling against the Iraqi central government on numerous occasions. The Kurds were granted autonomy within Iraq in 1970 and a provision was added to the constitution stating that “the Iraqi people are made up of two nationalities, the Arab nationality and the Kurdish nationality.” The agreement established the Kurdish Regional Government, or KRG. The Iraqi Kurds suffered persecution under the dictatorship of Saddam Hussein, who in 1988 attacked the Kurdish village of Halabja with chemical weapons, killing thousands of men, women, and children.

The relationship between Iraq and Kurdistan is further complicated by the rich oil fields located in the Kurdistan region, home to some 45 million barrels of oil and 110 trillion cubic feet of gas. Under current terms, the central government of Iraq has sole control over the export of any oil produced in Kurdistan, but KRG leaders pushing for increased economic independence have begun to siphon barrels of oil through Turkish channels rather than through the oil pipeline to Baghdad. According to a representative from the Kurdish legislature: “The existence of international oil companies has put the Kurdistan region on the radar.”

Why Now?

While Kurdistan has been in the business of oil export previously, Baghdad has not stepped in because of the limited capacity Kurdistan was exporting. Since the fall of Saddam Hussein, Kurdistan has experienced increasing autonomy under the new regime. Now, however, the construction of the new pipeline poses a substantial, permanent, and symbolic threat to Iraqi economic and political control over Kurdistan and has prompted Baghdad to keep a closer eye on Kurdistan’s economic activity.

Meanwhile, Kurdistan and Turkey continue to assert their rights to do business with one another, and increased oil independence could very soon lead to political independence for the Kurds; a senior energy advisor in the KRG asserts that “a plan is underway for Kurdistan to become an independent state in the near future” and “will be rid of its status as a region within Iraq.” From the point of view of the Kurdish government, ramping up oil production is the region’s greatest form of economic and political leverage against Iran.

Where to Go From Here?

Policy analysts fear the current tension between Iraq and Kurdistan will have a major regional effect, as exemplified by Turkey injecting itself in the political situation as of late. Kurdistan, in negotiating deals with other legitimate countries, increases its leverage over Baghdad and simultaneously creates an opening for violence. All this is occurring amidst the most violent year in Iraq since 2008, with Prime Minister al-Maliki also preoccupied with the militant takeover of areas in the western Akbar region of the country. In short, Iraq has its hands full at the moment, and the constant chaos in Iraq since the fall of Saddam is presumably why Baghdad has allowed Kurdistan to operate so autonomously thus far. Kurdistan’s oil wealth, however, is a huge motivator for the government to prioritize the current issue and retain a tight hold on the region.  

The demand for oil in the Middle East as a whole is insatiable, and the politicization of an economic issue in an already violence-ridden nation is an ominous setup for any diplomatic negotiations between Iraq, Kurdistan, and Turkey. All three parties have various motivations, yet all three are addicted to the oil. Brookings analyst Luay al-Khateeb asserts that Iraq and Turkey must engage in close cooperation to resolve the oil pipeline issue, and “should think of forming a state-to-state economic union and developing energy partnerships to sustain peace and prosperity.” While this recommendation holds water if Iraq and Kurdistan were unified, the two parties are working from disparate grounds, so any Iraqi-Turkey negotiations over Kurdish oil would be inherently ineffective.

The Iraqi government should not have turned a blind eye to Kurdistan’s oil exportations in the first place, only to return to strict policy adherence this late in the game. First and foremost, the oil control policy in the Iraqi constitution with regards to Kurdistan should be addressed prior to any bilateral deals with Turkey. Further, the Iraqi government only dances around the issue by targeting multinational oil companies, and should instead deal squarely with Kurdistan. In any case, without a resolution between Kurdistan and the central government in Baghdad, tensions are bound to explode, and the oil money only adds time pressure to an already deteriorating and fractured Iraq in 2014.