For years, the Kurdish Government (KRG) and the central government in Baghdad had a clear arrangement - all Iraqi oil revenues would go through the central government and the KRG would receive a fixed portion of the oil money. This worked reasonably well, though the Kurds also 'casually' exported about 40,000 barrels of oil a day, mainly by truck overland to Turkey and 'forgot' to hand this money over to Baghdad. Late last year a pipeline from the Kurdish oil fields to the Turkish port of Ceyhan was completed and early this year oil began to flow.
Then the central government decided to take into account the 'casual' exports of oil from Kurdistan and deducted it from the KRG's overall oil revenue. A bitter row ensured and in January of this year Baghdad suspended all oil payments to the KRG causing a major financial crisis in Kurdistan (which is still on going). Meantime oil began to be stock piled at Ceyhan as Baghdad and the KRG could not find a solution despite mediation by Turkey..
Then came the crisis in the Ukraine and Western Europe was sharply reminded of its dependency on Russian oil and gas. Looking for an alternative source of oil, the European attention focused both on the stockpile at Ceyhan and the pipeline from Kurdistan.
But who actually owns the oil stockpiled in Turkey? Baghdad or KRG.? This question was dramatically answered this week when the Kurds sold one million barrels, which as we speak is sailing towards Western Europe. Badgdad is naturally furious and is planning to take legal action, but in reality the Kurdish action must have had tacit support from Turkey, the US and the EU.
So what has this to do with Kurdish Independence? Now that the KRG can control both the delivery and the sale of oil from Kurdistan, it finally has its own direct source of income and no longer has to rely on Baghdad. After years of autonomy full independence is now possible. Whether Turkey, the US and the EU supports this next step is uncertain. Turkey is certainly not keen on an independent Kurdistan adjoining it's own Kurdish territory (nor is Iran) and the US wants to keep Kurdistan inside Iraq to ensure some sort of balance and stability. On the other hand the EU and the US want a reliable source of oil and Kurdistan can provide this.
The Kurds are now talking openly about a referendum on independence, a referendum which would clearly be overwhelmingly in favour of a free state. But this is the Middle East and nothing is what it seems. The Kurds are unlikely to declare independence and leave the disputed territories of Kirkuk and Khanaquin inside Arab Iraq. Are they just playing a long game to grab an even greater share of Iraq's oil revenue, hoping that Baghdad will concede in order to keep the country together? Guess we will just have to wait and see.
Then the central government decided to take into account the 'casual' exports of oil from Kurdistan and deducted it from the KRG's overall oil revenue. A bitter row ensured and in January of this year Baghdad suspended all oil payments to the KRG causing a major financial crisis in Kurdistan (which is still on going). Meantime oil began to be stock piled at Ceyhan as Baghdad and the KRG could not find a solution despite mediation by Turkey..
Then came the crisis in the Ukraine and Western Europe was sharply reminded of its dependency on Russian oil and gas. Looking for an alternative source of oil, the European attention focused both on the stockpile at Ceyhan and the pipeline from Kurdistan.
But who actually owns the oil stockpiled in Turkey? Baghdad or KRG.? This question was dramatically answered this week when the Kurds sold one million barrels, which as we speak is sailing towards Western Europe. Badgdad is naturally furious and is planning to take legal action, but in reality the Kurdish action must have had tacit support from Turkey, the US and the EU.
So what has this to do with Kurdish Independence? Now that the KRG can control both the delivery and the sale of oil from Kurdistan, it finally has its own direct source of income and no longer has to rely on Baghdad. After years of autonomy full independence is now possible. Whether Turkey, the US and the EU supports this next step is uncertain. Turkey is certainly not keen on an independent Kurdistan adjoining it's own Kurdish territory (nor is Iran) and the US wants to keep Kurdistan inside Iraq to ensure some sort of balance and stability. On the other hand the EU and the US want a reliable source of oil and Kurdistan can provide this.
The Kurds are now talking openly about a referendum on independence, a referendum which would clearly be overwhelmingly in favour of a free state. But this is the Middle East and nothing is what it seems. The Kurds are unlikely to declare independence and leave the disputed territories of Kirkuk and Khanaquin inside Arab Iraq. Are they just playing a long game to grab an even greater share of Iraq's oil revenue, hoping that Baghdad will concede in order to keep the country together? Guess we will just have to wait and see.
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