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all about the oil

Explainer: Why Iraq taking back land from the Kurds is a major headache for the US

The two US allies are at loggerheads over disputed territory in oil-rich Kirkuk.

Iraq The Kurds were driven out of oil-rich Kirkuk by Iraqi forces this week. Emad Matti AP / PA Images Emad Matti AP / PA Images / PA Images

THIS WEEK, IRAQI federal troops ousted Kurdish military forces from the northern provinces city of Kirkuk.

Crucially, Kirkuk is home to lucrative oilfields that is now under Iraqi government control, having previously been partly under Kurdish control since 2013.

The military action caught the Kurds by surprise, and went almost unopposed.

So, what exactly happened in Iraq this week? And how is it having a global effect?

Losing territory

The Kurds are an ethnic group in the Middle East, occupying regions of Turkey, Iran, Syria and Iraq.

They have a three-province autonomous region in northern Iraq but, from the time of the US invasion in 2003, Kurds supported the Americans and gained control of further lands in the country.

It also helped to fight ISIS alongside Iraqi security forces at the height of that crisis in 2014, which lead to the Kurds laying a claim on the oil-rich, and ethnically diverse, city of Kirkuk.

With the so-called Islamic State largely eradicated from the region, the Kurds planned to build its own separate nation-state.

Four weeks ago, it held its own independence referendum against the advice of the US.

IRAQ-KIRKUK-KURDS-VOTE Kurdish people dancing outside a polling station during the referendum vote in Kirkuk Ako Jihad / Xinhua News Agency/PA Images Ako Jihad / Xinhua News Agency/PA Images / Xinhua News Agency/PA Images

The referendum went on regardless and Kurds chose independence from Iraq.

Less than a month later, Iraqi forces moved in to disputed territory. On Monday and Tuesday, federal troops and allied militias retook the northern province and its lucrative oil fields, as well as formerly Kurdish-held areas of Nineveh and Diyala provinces.

Iraq Iraqi security forces Khalid Mohammed AP / PA Images Khalid Mohammed AP / PA Images / PA Images

The retreat of Kurdish forces, almost without a fight, triggered recriminations amongst Kurdish politicians and prompted the regional parliament to postpone elections set for 1 November.

In the wake of the successful military operation, Iraqi Prime Minister Haider al-Abadi said the Kurdish independence poll was a now “a thing of the past” and its results void.

Kurds now just controls the three-state region it originally owned before the US invasion, but it welcomed the offer of talks from al-Abadi.

Losing the oil

This week’s military operation also dealt a severe blow to the autonomous region’s finances, which had relied heavily on revenues from exports of Kirkuk oil.

Baghdad has retaken five oil fields from Kurdish forces in Kirkuk, leaving the Kurds in control of only one in the province.

The lost fields accounted for more than 400,000 of the 650,000 barrels per day that the autonomous Kurdish region used to export in defiance of Baghdad.

Baghdad was quick to capitalise on its gains.

Iraq Iraqi forces celebrating victory in Kirkuk Emad Matti AP / PA Images Emad Matti AP / PA Images / PA Images

Oil Minister Jabbar Luaybi appealed to British energy giant BP to “quickly make plans to develop the Kirkuk oil fields”.

Baghdad signed a consultancy contract with BP in 2013 to help develop the Havana and Baba Gurgur fields.

But it was never implemented as Baghdad lost control of the fields the following year during the chaos of the IS offensive through northern and western Iraq.

On Thursday, the Iraqi oil ministry reacted angrily after Russian energy giant Rosneft signed a production sharing deal with the authorities in the autonomous Kurdish region without its approval.

“This department and the Iraqi federal government are the only two bodies with whom agreements should be reached for the development and investments in the energy sector,” the ministry said in a statement, without mentioning Rosneft by name.

Oil Minister Jabbar al-Luaybi condemned the “irresponsible announcements coming from certain officials in Iraq or abroad, or from foreign companies about their intention to conclude deals with parties in Iraq without the federal government being aware”.

Bloomberg reported that the Kurdish regime was now in financial turmoil, after it made deals for a number of cash-for-oil loans.

Next steps

Right now, it is not known what retaliation, if any, the Kurds will take.

On Thursday, its regional government said it was open to talks with Baghdad.

“The cabinet welcomes the initiative of Prime Minister Haider al-Abadi on starting negotiations with the regional government to solve pending issues according to the constitution and principles of partnership,” it said in a statement.

“Kurdistan demands the help and contribution of the international community in sponsoring this dialogue,” it added.

Iraq A burned poster of Massoud Barzani, Kurdish president, is displayed in front of the abandoned building of Kurdish security forces in Kirkuk Khalid Mohammed AP / PA Images Khalid Mohammed AP / PA Images / PA Images

The actions of the Iraqi government were prompted by the referendum, after the two sides left each other fairly unhindered since driving IS out of the country. With the lucrative oilfields in Kirkuk, Iraq would not let the Kurds cede with that region in its control.


The Kurds won few friends in the international community through the independence vote, raising fears that the region could be destabilised again.

From America’s perspective, it sees Iraq as an ally and wants it as stable as possible, particularly with its escalating tensions with Iran.

At the time of the referendum, White House spokesperson Sarah Huckabee Sanders said: “We hope for a unified Iraq to annihilate ISIS, and certainly a unified Iraq to push back on Iran.”

With Iraq now holding the cards, all eyes will be on what the Kurdish authorities do next.

With reporting from AFP - © AFP 2017

Read: Iraqi forces seize ground from Kurds amid soaring tensions between two US allies

Read: Turkey is at a crossroads as millions turn out at referendum vote – but what is actually happening?

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