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First sale of Kurdish oil unveils a new era in the Kurdish national renaissance
05/28/20140
The Kurdish national renaissance has assumed a number of key milestones in a short but remarkable period of time. The onset of the first independent sale of Kurdish oil stored at the Turkish port of Ceyhan, was another critical milestone that gives Kurdistan a new political, economic and strategic gear as its enters a new phase in its evolution.
The decision to export its oil to the international market, much to the dismay of Baghdad, came as the official Iraqi election results saw incumbent Iraqi Prime Minister Nouri al-Maliki attain the front foot in his quest for a third term.
As Kurdistan has continued its ascendancy in recent years, control of oil became a significant factor of dispute between the Kurdistan Regional Government (KRG) and Baghdad. Put simply, control of oil exports was the last remaining umbilical cord that Baghdad had over the Kurds.
This leverage was clearly on display when Baghdad failed to pay Kurdish salaries and the Kurdish share of the national budget as punishment for the Kurdish move to build and
export oil to Turkey via its new independent oil pipeline.
Baghdad filed for arbitration against Ankara almost immediately at the International Chamber of Commerce, but in reality Turkey knew and openly accepted that the consequences with Baghdad were secondary to the strategic enhancement of their ties with the Kurds.
The storage capacity at Ceyhan was close to the limit, Baghdad appeared unwilling to give the Kurds the concessions it demanded and after months of negotiations a breakthrough was not about to take place anytime soon. All the while, the Kurds were in an ironic predicament. Kurdistan, with its billions of barrels of oil reserves and with millions of barrels stored in Ceyhan waiting to be sold to many international suitors, were at the mercy of Baghdad and couldn’t even pay salaries.
When you have masses of oil and wealth under your feet, which government in any part of the world would accept been dictated, undermined and held to ransom by a third-party?
Instead of waiting for hand-outs from Baghdad, the Kurds could soon surpass the value of their 17% share of the national budget with their own exports.
Turkish Energy Minister Taner Yildiz confirmed that 1.4 millions of oil was loaded via tankers and crucially backed further export of Kurdish oil as more oil is inevitably pumped.
In the same way as threats to independent export of oil, Baghdad continuously warned against oil majors entering the region and threatening to punish and blacklist such companies. In the end oil majors accepted the risks and after Exxon-Mobil entered the fray in 2011, a flock of majors simply couldn’t sit on the sidelines and waste unique opportunities.
In reality, Kurdistan wouldn’t have taken such a bold step without support not just from Turkey but also European powers over its constitutional rights. The oil was not sold on the black market but in an international, open and transparent market and to European customers.
Almost immediately after the first independent export of Kurdish oil, Kurdistan President Massoud Barzani went on a scheduled tour of Europe. The message from Barzani was clear – if Baghdad did not change its policies towards the Kurds,[You must be registered and logged in to see this link.] the Kurds could deploy other options it has on the table.
France clearly supported the Kurds in their move to market oil independently and according to Falah Mustafa, the head of Kurdistan Region’s Department of Foreign Relations, France “showed their willingness to support us in the next stage”.
It’s the not the first time that Kurds have threatened to take action against the centralist policies of Baghdad. After continuous failed promises by Maliki, the timing of the move echoed through the Iraqi political chambers that Kurds mean business and will match action with rhetoric.
The oil exports were crucially done before the establishment of the next government in Baghdad, affording the Kurds a more powerful negotiating position. They will not be duped into a new coalition with promises of allowing Kurdish oil exports. Instead the right of the Kurds to export oil becomes a prerequisite as opposed to a demand.
The Kurdish historical move is all the more significant that it was supported by Turkey, marking a dramatic turnaround in fortunes from a time when any notion of Kurdish nationalism was met with threats, harsh rhetoric and red lines.
Oil exports can only increase from these levels and serves as the fuel for independence – literally. Of course, Turkey acknowledges what oil export pipelines and sales means for the future of Kurdistan.
Yet, Turkey has so much to gain from a Kurdish friend with growing strategic and economic importance than an uncertain Baghdad leaning more towards Tehran, especially as the sectarian fires continue to rage in Iraq.
The Turkish position is even more ironic giving the U.S. resistance and unease of growing Kurdish independence, export of its oil and the growing ties between Erbil and Ankara that the US tried so hard to foster in the first place.
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05/28/20140
The Kurdish national renaissance has assumed a number of key milestones in a short but remarkable period of time. The onset of the first independent sale of Kurdish oil stored at the Turkish port of Ceyhan, was another critical milestone that gives Kurdistan a new political, economic and strategic gear as its enters a new phase in its evolution.
The decision to export its oil to the international market, much to the dismay of Baghdad, came as the official Iraqi election results saw incumbent Iraqi Prime Minister Nouri al-Maliki attain the front foot in his quest for a third term.
As Kurdistan has continued its ascendancy in recent years, control of oil became a significant factor of dispute between the Kurdistan Regional Government (KRG) and Baghdad. Put simply, control of oil exports was the last remaining umbilical cord that Baghdad had over the Kurds.
This leverage was clearly on display when Baghdad failed to pay Kurdish salaries and the Kurdish share of the national budget as punishment for the Kurdish move to build and
export oil to Turkey via its new independent oil pipeline.
Baghdad filed for arbitration against Ankara almost immediately at the International Chamber of Commerce, but in reality Turkey knew and openly accepted that the consequences with Baghdad were secondary to the strategic enhancement of their ties with the Kurds.
The storage capacity at Ceyhan was close to the limit, Baghdad appeared unwilling to give the Kurds the concessions it demanded and after months of negotiations a breakthrough was not about to take place anytime soon. All the while, the Kurds were in an ironic predicament. Kurdistan, with its billions of barrels of oil reserves and with millions of barrels stored in Ceyhan waiting to be sold to many international suitors, were at the mercy of Baghdad and couldn’t even pay salaries.
When you have masses of oil and wealth under your feet, which government in any part of the world would accept been dictated, undermined and held to ransom by a third-party?
Instead of waiting for hand-outs from Baghdad, the Kurds could soon surpass the value of their 17% share of the national budget with their own exports.
Turkish Energy Minister Taner Yildiz confirmed that 1.4 millions of oil was loaded via tankers and crucially backed further export of Kurdish oil as more oil is inevitably pumped.
In the same way as threats to independent export of oil, Baghdad continuously warned against oil majors entering the region and threatening to punish and blacklist such companies. In the end oil majors accepted the risks and after Exxon-Mobil entered the fray in 2011, a flock of majors simply couldn’t sit on the sidelines and waste unique opportunities.
In reality, Kurdistan wouldn’t have taken such a bold step without support not just from Turkey but also European powers over its constitutional rights. The oil was not sold on the black market but in an international, open and transparent market and to European customers.
Almost immediately after the first independent export of Kurdish oil, Kurdistan President Massoud Barzani went on a scheduled tour of Europe. The message from Barzani was clear – if Baghdad did not change its policies towards the Kurds,[You must be registered and logged in to see this link.] the Kurds could deploy other options it has on the table.
France clearly supported the Kurds in their move to market oil independently and according to Falah Mustafa, the head of Kurdistan Region’s Department of Foreign Relations, France “showed their willingness to support us in the next stage”.
It’s the not the first time that Kurds have threatened to take action against the centralist policies of Baghdad. After continuous failed promises by Maliki, the timing of the move echoed through the Iraqi political chambers that Kurds mean business and will match action with rhetoric.
The oil exports were crucially done before the establishment of the next government in Baghdad, affording the Kurds a more powerful negotiating position. They will not be duped into a new coalition with promises of allowing Kurdish oil exports. Instead the right of the Kurds to export oil becomes a prerequisite as opposed to a demand.
The Kurdish historical move is all the more significant that it was supported by Turkey, marking a dramatic turnaround in fortunes from a time when any notion of Kurdish nationalism was met with threats, harsh rhetoric and red lines.
Oil exports can only increase from these levels and serves as the fuel for independence – literally. Of course, Turkey acknowledges what oil export pipelines and sales means for the future of Kurdistan.
Yet, Turkey has so much to gain from a Kurdish friend with growing strategic and economic importance than an uncertain Baghdad leaning more towards Tehran, especially as the sectarian fires continue to rage in Iraq.
The Turkish position is even more ironic giving the U.S. resistance and unease of growing Kurdish independence, export of its oil and the growing ties between Erbil and Ankara that the US tried so hard to foster in the first place.
[You must be registered and logged in to see this link.]
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