Oil exports at risk from Kurdish vote

Risk consultant group warns Turkey holds leverage over the Kurdish economy, but also faces risk from sectarian conflict.
By Daniel J. Graeber  |  Sept. 25, 2017 at 6:15 AM
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Sept. 25 (UPI) -- An autonomous Kurdistan in northern Iraq could face financial risk from neighbors like Turkey who control the oil lifeline, a risk consultant group said.

Monday's 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. A publication Sunday from the Kurdistan Regional Government said the federal government in Baghdad has violated "no less than 55" of the 144 articles in Iraqi constitution and that, according to charter of the United Nations, it has the right to self-determination.

The vote is contentious on the global stage because of concerns about regional stability. Anthony Skinner, a director of regional affairs for risk consultant group Verisk Maplecroft, said in a report emailed to UPI that Turkey, the Kurdish region's northern neighbor, has substantial leverage over the economy.

"Cutting Iraqi Kurdistan's land access to the Mediterranean would be equivalent to restricting the coronary artery feeding Kurdistan's heart," he wrote.

A pipeline from the Kurdish north has the capacity to carry 550,000 barrels of oil per day. Skinner said independence for Kurdish region would be "meaningless" if Turkey closed the option to ship that oil from its Ceyhan seaport on the Mediterranean Sea.

Most foreign governments have come out against Kurdish ambitions. Heather Nauert, a spokesperson for the U.S. State Department, said the referendum is strongly opposed by the U.S. government, which favors sustained dialogue between the Kurdish and federal governments.

"The referendum may jeopardize Iraqi Kurdistan's regional trade relations, and international assistance of all kinds, even though none of Iraq's partners wish this to be the case," she said last week. "This is simply the reality of this very serious situation."

Kurdish oil exports north through Turkey have been at times targeted by the group calling itself the Islamic State. Turkey, for its part, is at the front lines of regional conflict in Syria and faces its own internal pressures from the militant Kurdistan Workers' Party, known by its Kurdish initials PKK.

"The last thing Turkey needs is for Iraqi Kurdistan to be plunged into sectarian conflict," Skinner wrote.

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