x Abu Dhabi, UAETuesday 25 July 2017

As Kurdish oil flows north, did Baghdad overplay its hand?

Oil from the Kurdish-administered sector of Iraq is due to go through Turkey, removing some of Baghdad's power over the semi-autonomous sector and possibly risking Iraq's contiguity.

When the first oil begins flowing from the Kurdish-administered sector of Iraq through Turkey to the Mediterranean in the next month, it might seem like reward for the rapprochment between Erbil and Ankara.

But while it reflects the thawing of frosty relations between Turkey, previously notorious for its ruthless suppression of its Kurdish population’s aspirations, and the Kurdistan Regional Government, it risks the sustainability of Iraq as a unitary nation.

For this, Iraq’s central government must look to its own actions.

The KRG blames Baghdad’s intransigence as a major factor in its decision to look north rather than south when it came to getting its oil to world markets.

The plan is for up to two million barrels of oil a day to eventually go through a new network of pipes connecting to an existing pipeline from Kirkuk to Ceyhan, a Turkish port that is already a major oil terminus because of a pipeline from Azerbaijan.

The Kirkuk-Ceyhan pipeline had been effectively idled for years, first by sanctions during the Saddam era and then by frequent acts of sabotage as Iraq’s security crumbled following the US-led invasion.

Baghdad had used its control over the means of exporting oil as a trump card when negotiating with Erbil, intending to decrease the semi-autonomous Kurdish region’s increasing financial independence and thus its further estrangement from the larger nation.

Until the pipeline begins operations, possibly within weeks, oil from Kurdish Iraq had been going to Turkey by truck, restricting the export capacity – and thus the income derived from it – to around 50,000 barrels a day. When the pipeline begins operations, the initial flow will be 300,000 to 400,000 barrels a day.

By doing so, Erbil will have neutralised what had been Baghdad’s main power over it, thanks in part to Turkish prime minister Recep Tayyip Erdogan who actively courted the pipeline deal so that his energy-poor nation can benefit from Iraq’s oil reserves.

Part of the arrangement is for a state bank in Turkey and not Baghdad to hold the revenue from the oil, removing yet another bargaining chip the central Iraqi government had used on the KRG.

Baghdad must now be wondering if it overplayed its hand, when what was at stake might end up being the integrity of the Iraqi state.