Iraq/Kurdistan: Untangling The Threads of The Baghdad-Erbil Oil Deal

Jan 10, 2015 | Emmanuela Eposti, Middle East Monitor
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The announcement of last month's breakthrough oil deal between Baghdad and Erbil was widely greeted with positive murmurings in the Western press. The deal, which came into effect on the first of this month, marked a watershed moment in relations between Iraq's capital and the semi-autonomous northern region of Kurdistan, and a thawing of political and strategic ties that have been under strain since January 2014.

The Kurdish Regional Government (KRG) controls around one fifth of Iraq's territory and more than a quarter of its oil fields, but until recently Baghdad has attempted to prevent the sale of Kurdish oil on the open market, accusing the KRG of plundering Iraq's natural resources. In June 2014, the KRG succeeded in selling a reported one million barrels of crude oil piped through Ceyhan in southern Turkey. In effect, despite Baghdad's protestations, the Kurds had little difficulty in finding commercial buyers for their oil, and indeed even succeeded in undercutting Baghdad's prices.