Baghdad Recognizes Kurds’ Oil Claims

Huge news if true: according to The New York Times, the Iraqi government has agreed to allow the Kurds to export the oil developed within the borders of their autonomous super-province. This isn’t the same thing as the passage of the much-desired-and-much-delayed hydrocarbons law, but it has large implications for both that law and the future stability of Iraq.

First, the context. The Kurds have oil reserves inside the Kurdistan Regional Government that, by some estimates, rival Nigeria’s. Naturally, they claim the right to that oil — it’s under their land, after all — as a natural resource that will bankroll a viable independent Kurdistan one day. Losing that oil will be a disaster for Iraqi Arabs. While Iraq has been preoccupied by occupation and insurgency, the Kurds have moved forward with the development of the oil fields, inking deals with wildcatting oil companies at very favorable prices. The catch is that it’s been unclear what happens to that oil, since the Iraqi government has reserved the exclusive right to the fields that contain it.

The details of the deal are unclear, The Times reports, but here’s what appears to be the substance of it:

Under the terms, the Kurds can begin exporting about 60,000 barrels of oil a day from the Tawke field starting on June 1, and an additional 40,000 barrels a day from a second field, Taq-Taq, later in the month. The oil will be marketed by the central government and all revenue will go to Baghdad, said Asim Jihad, chief spokesman of the Oil Ministry.

Sending “all revenue” to Baghdad, with the central government “market[ing]” the oil makes it unclear what the Kurds actually get out of this deal, as The Times notes. One answer: the Kurds want the Baghdad government to simply recognize their claim to the oil. Once that happens, the Kurds can drive a harder bargain in the ongoing negotiations over the hydrocarbon law, which will supposedly delineate how Iraq’s various ethnic and sectarian and regional interests will each benefit (or lose out) from the nation’s oil bounty. And there’s an additional issue at stake: now that Iraqi Arabs are recognizing Kurdish oil claims, the Kurds have more incentive to expand the territory they control, into oil-rich disputed regions under Baghdad’s control, like Kirkuk, that they’ve long claimed.

More as soon as the terms of the deal become clearer.