The post-independence referendum reality doesn’t look bright for Iraqi Kurds, and an ongoing military showdown with Baghdad over control of a key border crossing underscores how fragile Irbil’s hold on autonomy really is.
On Wednesday, negotiations reportedly broke down between Kurdish Peshmerga and Iraqi forces facing off over the Fishkhabour border crossing with Turkey and Syria. Both sides are now back to “square one,” according to reports.
This comes days after the United States had nudged Kurdish and Iraqi forces to reach an apparent agreement to share control over the critical border crossing — a vital gateway to Turkey and a chokepoint for Iraqi Kurdistan’s crude oil exports.
The Iraqi advance all the way north to Fishkhabour marks an escalation in Baghdad’s pushback against the Kurdistan Regional Government (KRG). Fishkhabour is in clearly undisputed Kurdish territories — unlike the disputed city of Kirkuk, retaken from Kurds by Iraqi federal forces in mid-October. More importantly, Iraqi control of the border crossing and the oil pipeline there represents a serious threat to Kurdish autonomy. Without the billions of dollars generated by exporting oil through that pipeline, the region in northern Iraq could never stand on its own.
“Going forward, Baghdad is trying to erode the military and economic pillars of Kurdish autonomy,” said Ben Van Heuvelen, the editor in chief of Iraq Oil Report. “Given the new realities on the ground, the [KRG] doesn’t have the luxury of ignoring Baghdad anymore.”
Oil was meant to set Irbil free. After years of clashing with Baghdad over revenue sharing from the country’s crude exports, officials in landlocked Kurdistan finally got substantial access to the sea with the completion in 2014 of a crude oil pipeline snaking through Kurdish territory to the Turkish border. That allowed the Kurdish government to export as much as 600,000 barrels of crude per day to the Mediterranean port of Ceyhan — worth billions a year even with cheap oil prices.
Baghdad, which under the Iraqi Constitution is meant to export all the nation’s oil and then divvy up the proceeds, couldn’t physically stop the Kurdish exports — especially because Irbil had the support of Turkey.
“The Kurdish pipeline connects to the ITP [Iraq-Turkey pipeline] downstream of the federal government’s metering station,” a former manager with an oil field services company active in the Kurdistan region told Foreign Policy — essentially bypassing central government oversight. “The Iraqis couldn’t go in and say how much the Kurds could and could not export.”
But with the renewed prospect of central government control over Fishkhabour and all the oil infrastructure there, Baghdad has regained the ability to shut down exports from Kurdish fields in the north. That will give the government significant leverage in future budget negotiations and might allow it to force the KRG back into a new revenue-sharing agreement.
“If the federal government controls Fishkhabour and has the ability to turn off the pipeline at its discretion, the KRG actually has to work with Baghdad on the budget,” Heuvelen said.
Control over Fishkhabour also gives the Iraqi government insurance against a downturn in its relations with Turkey, which has facilitated the export and payment of Kurdish crude to global markets.
“The Iraqi government knows that if at some point in the future [Turkish President Recep Tayyip] Erdogan changes his mind and turns against Baghdad, [as long as the Kurds control Fishkhabour] Turkey can go back to an independent energy relationship with the Kurds,” said Michael Knights, a fellow at the Washington Institute for Near East Policy.
Despite the potential leverage, there are big political and financial reasons why Baghdad would be hesitant to completely cut off Kurdish oil exports at Fishkhabour.
The KRG has racked up debts to international oil companies operating in its region; if exports and revenues dry up because of Baghdad, it’s unclear if that would create any legal liability for the Iraqi government.
More to the point, cutting off Kurdish exports entirely would destroy the Kurdish region’s economy, already reeling from relatively low oil prices and a huge budget drain that came from accepting displaced people and refugees during the battle against the Islamic State. Since the Islamic State went on a rampage across northern Iraq beginning in 2014, Irbil has struggled to maintain services, pay civil servants, and care for refugees. Cutting off oil exports would make that worse.
“One of the pillars of [Iraqi Prime Minister] Haider al-Abadi’s rhetoric has been that he’s acting against an irresponsible and corrupt KRG leadership — but on behalf of the Kurdish citizens of Iraq,” Heuvelen said.
“If he does something that tanks the Kurdish economy, that talking point becomes hollow,” he said.