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Kurdistan and Iraq Reach an Oil Deal
3/12/15
Kurdistan agreed to export 97 percent of its oil to Baghdad. In return, the central government will allow northern Iraq to have more access to the monthly budget.
Major Producer
Kurdistan has become a major oil producer in recent years, and Baghdad officials are worried that the northern region is gaining greater autonomy. Exxon Mobil has been cozying up to the Kurds, but the oil giant has found itself at odds with the central government. Exports from northern Iraq reached 400,000 barrels a day on Monday, an increase from 350,000 bpd from the previous week, and up to 300,000 bpd in the beginning of 2014.
The Kurds have been trying to gain independence since the 1920s, and they have been an oppressed minority group in Iraq, most notably Saddam Hussein's genocide campaign. Now, many Kurds feel repressed economically. The Iraqi government forced the Kurds to concede by slashing the country's budget from January of this year. This was in response to Kurdistan's effort to export oil without permission from central authorities, and the cuts forced the region to take foreign loans to sustain the economy.
ISIS Response
One reason why the Kurds accepted the oil deal is that it needs additional funding to combat ISIS fighters in the region. Additionally, the Baghdad government benefits by having additional oil to help recover from low oil prices and spend extra money fighting ISIS. Iraqi forces have already contended with the burning of oil wells on the outskirts of Tikrit at the hands of ISIS, and the Peshmurga forces of Kurdistan are on the same offensive. The good news is that the Baghdad and Kurdistan governments are working together to fight a common enemy, but the two still cannot agree on economic matters.
The Feud Continues
Even though the north and south face a threat in the form of ISIS, the two governments are still at each other's throats, and this new deal is already going south. For instance, Baghdad only gave a portion of the budget amount agreed upon because authorities said the shipments were less than expected. But the Kurds point to outages in Turkey and issues at the Kirkuk oilfields as reasons for the shortage. It appears that the two sides will not agree on issues anytime soon, but both governments need to work together in protecting the oil fields and forging stronger economic ties, otherwise they may have nothing to fight about if ISIS continues to spread.
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3/12/15
Kurdistan agreed to export 97 percent of its oil to Baghdad. In return, the central government will allow northern Iraq to have more access to the monthly budget.
Major Producer
Kurdistan has become a major oil producer in recent years, and Baghdad officials are worried that the northern region is gaining greater autonomy. Exxon Mobil has been cozying up to the Kurds, but the oil giant has found itself at odds with the central government. Exports from northern Iraq reached 400,000 barrels a day on Monday, an increase from 350,000 bpd from the previous week, and up to 300,000 bpd in the beginning of 2014.
The Kurds have been trying to gain independence since the 1920s, and they have been an oppressed minority group in Iraq, most notably Saddam Hussein's genocide campaign. Now, many Kurds feel repressed economically. The Iraqi government forced the Kurds to concede by slashing the country's budget from January of this year. This was in response to Kurdistan's effort to export oil without permission from central authorities, and the cuts forced the region to take foreign loans to sustain the economy.
ISIS Response
One reason why the Kurds accepted the oil deal is that it needs additional funding to combat ISIS fighters in the region. Additionally, the Baghdad government benefits by having additional oil to help recover from low oil prices and spend extra money fighting ISIS. Iraqi forces have already contended with the burning of oil wells on the outskirts of Tikrit at the hands of ISIS, and the Peshmurga forces of Kurdistan are on the same offensive. The good news is that the Baghdad and Kurdistan governments are working together to fight a common enemy, but the two still cannot agree on economic matters.
The Feud Continues
Even though the north and south face a threat in the form of ISIS, the two governments are still at each other's throats, and this new deal is already going south. For instance, Baghdad only gave a portion of the budget amount agreed upon because authorities said the shipments were less than expected. But the Kurds point to outages in Turkey and issues at the Kirkuk oilfields as reasons for the shortage. It appears that the two sides will not agree on issues anytime soon, but both governments need to work together in protecting the oil fields and forging stronger economic ties, otherwise they may have nothing to fight about if ISIS continues to spread.
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