Kurdish government open to dialogue

Turkey last week threatened to choke off oil export options from the Kurdish north of Iraq following a vote for independence.
By Daniel J. Graeber  |  Oct. 2, 2017 at 8:11 AM
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Oct. 2 (UPI) -- After oil shocks rippled through the market last week, the Kurdish government in Iraq said it was welcoming calls for dialogue from a leading Iraqi cleric.

A risk premium last week supported the rally in crude oil prices after Turkey said it could cut export routes from the Kurdish north to the Ceyhan port on the Mediterranean Sea following a Kurdish referendum for independence from Iraq. Despite widespread criticism, the Kurdish government said it had the right to self-determination following years of grievances with the federal government in Baghdad.

During Friday prayers, a representative for Grand Ayatollah Ali al-Sistani, Iraq's leading Shiite cleric, called for a political solution.

"We believe that continuous dialogue is vital for protecting coexistence, harmony, and reaching common agreement," a statement attributed Sunday to the majority of the political parties in the Kurdish north read. "Dialogue also prevents hatred, discrimination and racism, which are, regrettably, surfacing in Iraq due to the current political environment."

Sistani positioned himself as the voice of moderation at the beginning of the Iraq conflict in 2003, but his clout diminished with the rise in influence of Moqtada Sadr.

Internally, both sides are at odds over the distribution of the share of oil revenue from Iraq, one of the strongest producers among members of the Organization of Petroleum Exporting Countries. The central government, meanwhile, had accused the Kurdish side of not doing its share in supporting an OPEC-led effort to balance the market with managed production declines.

About a half million barrels of oil per day move from the Kurdish north through a pipeline to a Turkish port on the Mediterranean Sea. Ankara said it would close the tap in response to a referendum widely criticized by major world powers. On Saturday, Turkish President Recep Tayyip Erdogan said the Kurdish region "will pay the price" for the referendum.

So far, there are no indications that exports from or production in the Kurdish region have been impacted by last week's referendum. The price for Brent crude oil, the global benchmark for the price of oil, was down more than 1.5 percent in early Monday trading.

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