Iraq/Kurdistan: Kurdish Oil Deal with Baghdad Unravels as Tensions Rise

Mar 13, 2015 | Isabel Coles, Rania El Gamal, and Dmitry Zhdannikov, Reuters
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A four-month-old oil deal between Iraq and the semi-autonomous Kurdistan region is close to unraveling after payments from Baghdad dried up, prompting Arbil to threaten to sue buyers and ramp up independent oil exports.

The dispute highlights fundamental differences between the two sides over who controls oil resources and revenues and will reinforce the views of many Iraqi watchers that Kurdistan would seek bigger if not full independence from Baghdad one day.

Baghdad cut budget payments to the Kurds in January 2014 as punishment for their attempts to export oil independently, plunging the semi-autonomous region into economic crisis and forcing it to seek loans at home and abroad.