Oil real prize of Iran’s Kur­dish ad­ven­ture

Kuwait Times - - Analysis -

Af­ter help­ing Iraq sti­fle a Kur­dish push for in­de­pen­dence, Iran is now po­si­tion­ing it­self to take con­trol of oil ex­ports from the re­gion’s gi­ant Kirkuk field, with the first de­liv­er­ies ex­pected within days, of­fi­cials and trad­ing sources said. In the weeks since Septem­ber’s failed Kur­dish in­de­pen­dence ref­er­en­dum, Iraq has agreed for the first time to di­vert crude from Kirkuk prov­ince, which it re­took from the Kurds, to Iran, where it will sup­ply a re­fin­ery in the city of Ker­man­shah.

Iran is locked in a proxy war with its re­gional ri­val and US ally, Saudi Ara­bia. As well as Iraq, it has been ex­tend­ing its in­flu­ence in Syria, Ye­men and Le­banon, rais­ing in­creas­ing con­cerns in Wash­ing­ton and Riyadh. Un­der the new ar­range­ment, the first oil will be trucked across the bor­der in the com­ing days. Ini­tially Iran will re­ceive 15,000 bar­rels per day worth nearly $1 mil­lion, ris­ing grad­u­ally to 60,000 bpd, ac­cord­ing to Iraqi of­fi­cials and trad­ing sources.

Bagh­dad and Tehran have also re­vived a project to build a pipe­line to carry oil from Iraq’s Kirkuk fields to cen­tral Iran and on­wards for ex­port from the Gulf. Hamid Hos­seini, the Ira­nian sec­re­tary-gen­eral of the Iran-Iraq Cham­ber of Com­merce, said Iran want to build a pipe­line that can take as much as 650,000 bpd of Kur­dish oil for its do­mes­tic re­finer­ies and for ex­ports. The pipe­line would re­place ex­ist­ing ex­port routes for crude from north­ern Iraq via Turkey and the Mediter­ranean and would be a blow to Ankara’s hopes of be­com­ing an en­ergy hub for Europe.

It would also be ev­i­dence of a US fail­ure to pre­vent a rap­proche­ment be­tween its ally Iraq and one of its big­gest po­lit­i­cal foes, Iran, which is rapidly re­gain­ing in­flu­ence in the Mid­dle East. That is in part due to gen­eral Qassem Soleimani, com­man­der of the Quds force, the in­ter­na­tional branch of the Rev­o­lu­tion­ary Guards, which is also tak­ing a keen in­ter­est in Iran’s oil busi­ness in Iraq. Soleimani vis­ited Iraqi Kur­dis­tan in Septem­ber to warn the re­gion against hold­ing an in­de­pen­dence vote. He was also in­volved in the Iraqi army’s re­cap­ture of Kirkuk.

“In Iraq, Ira­nian forces are work­ing to sow dis­cord as we re­cently saw in Kirkuk, where the pres­ence of Quds force com­man­der, Qassem Soleimani, ex­ac­er­bated ten­sions among the Kurds and the gov­ern­ment in Bagh­dad,” US Sen­a­tor John McCain said in Wash­ing­ton last week.

Kur­dish di­vi­sion

“The Kur­dish dream of be­ing a big oil ex­porter is in tat­ters,” said a source close to the gov­ern­ment in Er­bil, who pre­dicted that “Iran will be king of the game”. The Kurds’ bid for in­de­pen­dence an­gered Turkey and Iran, which both have large Kur­dish pop­u­la­tions and con­demned the ref­er­en­dum as desta­bi­liz­ing the re­gion. The United States also called on Kur­dis­tan to scrap the vote. But it was prob­a­bly in­ter­nal Kur­dish di­vi­sions which doomed the ref­er­en­dum to fail­ure, lo­cal po­lit­i­cal sources be­lieve. Oil was at the heart of this dis­pute.

The Kirkuk fields were con­trolled by Iraq’s state oil firm SOMO be­fore be­ing taken over by Kur­dish forces in 2014, when the Iraqi army re­treated in the face of at­tacks by Is­lamic state. The Pa­tri­otic Union of Kur­dis­tan party (PUK), in Su­laimaniya, then ac­cused the rul­ing Kur­dis­tan Demo­cratic Party (KDP) party of then Pres­i­dent Mas­soud Barzani, based in the cap­i­tal Er­bil, of not shar­ing the oil wealth. The PUK wanted to ex­port oil from Kirkuk to Iran.

“We tried to make Barzani ac­cept joint man­age­ment be­tween Er­bil and Su­laimaniya over the fields but he strongly op­posed it,” said Sherzad Yaba, a po­lit­i­cal ad­viser close to the PUK. “To put an end to the il­le­git­i­mate con­trol of the KDP over Kirkuk oil, se­nior mem­bers from the PUK con­tacted both Bagh­dad and Tehran and en­cour­aged the Ira­ni­ans to build a pipe­line to ex­port Kirkuk crude through Ban­dar Ab­bas port,” said Yaba.

The project lay dor­mant even though Iraqi oil min­is­ter Jabar Al-Luaibi and his Ira­nian coun­ter­part Bi­jal Zan­ganeh signed a mem­o­ran­dum on the project in Fe­bru­ary. Af­ter the ref­er­en­dum, the KDP ac­cused the PUK of strik­ing a deal with Iran to with­draw from Kirkuk, which the PUK de­nies. The re­cap­ture of Kirkuk was co­or­di­nated with Soleimani and left Iraqi gov­ern­ment troops in con­trol of half of all Kur­dish oil out­put. As Kur­dish engi­neers fled the fields, out­put from Kirkuk was sus­pended and has re­mained shut for the past five weeks as Bagh­dad and Er­bil ar­gue over the rev­enue split. —Reuters

Iraq to start truck­ing $1m worth of oil daily to Iran

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