Kurdish Oil Deal With The National Government in Iraq

It has been reported that the Iraqi National Government has made a deal with the Kurdish government in Northern Iraq with regards to Iraq’s oil. According to reports, 

“Under the deal struck on Tuesday, 300,000 barrels per day (bpd) of oil from Kirkuk will be exported via a pipeline through Kurdish territory into Turkey, in addition to 250,000 bpd from Kurdish oil fields. The crude will be sold by Iraq’s state oil marketing organization (SOMO), representing a major compromise by the Kurds, who have long insisted the constitution entitles them to sell oil on their own terms.

In return, Baghdad will resume budget payments to the Kurdish regional government (KRG), which has faced a financial crisis ever since the federal government cut funding to them early this year. Baghdad will also disburse $1 billion toward salaries and equipment of the Kurdish peshmerga forces, who have proven more successful than the Iraqi army in fending off the Islamic State in Iraq and the Levant (ISIL) offensive” (Al Jazeera, 2014).

This deal is said to be important because it helps with regards to domestic unification efforts. Many Kurdish representatives have felt that the Iraqi government has not given them sufficient resources, and thus, have called for additional autonomy, with many arguing for outright independence. And since much of the north has oil, this was a possibility that concerned many in Baghdad.

While this move does seem to ease such discussions, it will be important to ensure that fair profit sharing will actually arise from this deal. It will also be important to provide necessary resources to the Kurdish population in the north. If not, the odds of this deal holding may be slim, given that historically, the government under Nouri Al-Maliki did not do enough to bring different groups together, and, as a result, some in the north have called to secede from Iraq.