Battle For Oil Revenue: Iraqi-Kurdish Standoff For Kirkuk

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Battle For Oil Revenue: Iraqi-Kurdish Standoff For Kirkuk

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Last night, clashes erupted between Iraqi government forces and the Kurdish Peshmerga, a military force of the separatist Kurdistan Regional Government (KRG), in the countryside of Kirkuk city in northern Iraq.

The city and its oil-rich countryside are now controlled by KRG forces. In turn, government troops are aiming to restore the federal govrnment control over the area.

The KRG-linked media argues that the Peshmerga is defending a democratic will of the Kirkuk people [Kirkuk has never been an official part of the Iraqi Kurdistan Region]. The federal government says that it’s going to restore the law and order in the area.

Indeed, the oil is one of the key reasons behind  the ongoing tesnsions:

The specificity of Iraq is that oil reserves are located mainly in two areas – the north (Kurdistan Region and Kirkuk) and south (field near the ports of the Persian Gulf). The main export routes for Iraq are through the Persian Gulf and Turkish ports. Refineries are located in central Iraq (Baghdad) and near Kirkuk (Baiji refinery). So, the pipes unite ​​Kirkuk, Baghdad and ports in the south, export pipelines are sent to Turkey and Syria.

The main national strategic of oil pipeline is a pipeline from the Kirkuk fields to the Persian Gulf. The pipeline passes through the capital of the country and can be operated in reverse direction, delivering raw materials from the southern fields near the Persian Gulf to Baghdad.

The most interesting situation has already happened with the main export pipeline between Iraq and Turkey. There are two pipelines, one is controlled by the central government Iraq; the second one is built by the government of Kurdistan Region. After the commissioning of its own pipeline in May 2014 Erbil began independent supply of energy to Turkey, by passing Baghdad. Since then, Kurdish autonomy has been constantly increasing oil exports in its pipeline . In September 2015 the volume of domestic exports reached 602 th. barrels. / day.

In recent years there has constantly been a lot of problems with the export of resources to Turkey. And the main reason is blowing up pipes in the Turkish area. Only in August 2015, exports of Kurdish oil fell by 30% compared to July due to the fact that the pipeline was closed for 9 days. According to the estimates of the Ministry of Natural Resources of the Kurdistan Region,in the period from July to September, the Kurdish autonomy underpaid about $ 500 million because of problems with the Turkish oil pipeline.

The pipeline is expected to be extended From Iraq to the port of Baniyas in Syria. Previously, it was used as an additional export route. However, after the beginning of the civil war, and then the onset of ISIL in Iraq, the pipeline is practically not functioning. [more about the Middle Eastern oil and gas infrastructure HERE]

The KRG sees the oil reserves of Kirkuk province as a key source of the funding for the KRG-held area. Without it, the KRG will have much less chances to success if it decleares independence from Iraq.

Battle For Oil Revenue: Iraqi-Kurdish Standoff For Kirkuk

Click to see the full-size map

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