Kurdish vote hurts trade, U.S. says

Oil from the Kurdish north of Iraq is sent by truck and pipeline for exports from a Turkish sea port.
By Daniel J. Graeber  |  Sept. 21, 2017 at 6:18 AM
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Sept. 21 (UPI) -- Sending oil north through Turkey, trade relations for the Kurdish north of Iraq could be hurt through a vote for independence, the U.S. State Department said.

A referendum of independence for the Kurdish region of northern Iraq is set for Sept. 25. The vote follows several decades of acrimony between Kurdish administrators and the federal government in Baghdad, acrimony that predates the U.S.-led invasion in 2003.

In an August speech before legislators, Kurdish Prime Minister Nechirvan Barzani said patience with Baghdad was wearing thin. The war with the terrorist group calling itself the Islamic State, the decline in global crude oil prices and an "unjust decision" by Baghdad to cut its share of the budget left it with a "heavy financial strain."

Heather Nauert, a spokesperson for the U.S. State Department, said the referendum is strongly opposed by the U.S. government. Among other things, the referendum could jeopardize Kurdish trade relations in the region.

"This is simply the reality of this very serious situation," she said in a statement.

Kurdish oil is exported north to Turkish ports and at times was the target of attacks from the group calling itself the Islamic State. In meetings with U.S. defense officials last month, Barzani said the referendum wouldn't interfere with ongoing operations against the Islamic state.

Gulf Keystone Petroleum, a British company with a portfolio based in Iraq, said it had enough cash on hand to invest in more crude oil production from the Kurdish north. Total average gross production from its Shaikan oil field last year was at the upper range of its guidance.

Russian oil company Rosneft said Monday it was now ready to consider working with the Kurdistan Regional Government on new gas pipeline infrastructure. Agreements on development could materialize by the end of the year.

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