Logistics: Kurds Struggle For Freedom And Oil

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August 11, 2014:   The Iraqi government recently scored a victory in their campaign to prevent the Kurds in the north from selling any more of the oil the Kurds are now pumping and shipping out via Turkey. This win came in the United States where lawyers representing Iraq convinced an American court to block the sale of a million barrels of Kurdish oil in the United States. As of August 1 st this leaves a tanker carrying a million barrels of Kurdish oil stranded in a Texas port while lawyers representing Iraq and the Kurds continue to argue over whether the autonomous Kurds of northern Iraq can actually own and can sell oil pumped from Kurdish controlled oil fields. The U.S. court, for the moment, agrees with Iraq that all oil pumped in Iraq (which the autonomous Kurdish territory is still technically part of) is owned by the Iraqi government. The Kurds point out that the share of Iraq oil income promised them has been plundered by corrupt Arab politicians in the Iraqi government and that the only way to get their fair share is to pump it, ship it and sell it themselves. The Kurds currently have three tankers at sea filled with their oil but the Iraqi government has lawyers standing by to halt any sale of this oil.

The Kurds had hoped that the Iraqi government would relent because in June, when Iraq asked the Kurds to send some of their troops south to fight ISIL Islamic terrorists forces threatening to march on Baghdad, the Kurds did move south. But the Kurds want the Shia dominated Iraq government to stop opposing Kurdish efforts to export and sell oil pumped within the Kurdish controlled areas of northern Iraq. The Arab Iraqis, for the moment, do not believe Kurdish military assistance is worth that high a price.

In April 2013 Iraqi Kurds sold their first shipment of Kurdish oil (produced in oil fields developed by Kurds in Kurdish controlled territory.) This oil was trucked across the border to Turkey and sold for $22 million. The Iraqi government loudly protested this independent oil operation but the Iraqi armed forces were not powerful enough to stop the Kurds.

It was back in 2012 that the Kurdish government in northern Iraq announced that they would begin exporting oil via a pipeline through Turkey by 2013 and then ship it to buyers worldwide. The Iraqi government insisted that this would not happen. This is an Arab/Kurd conflict, part of a struggle that goes back thousands of years. The Kurds are relying on Turkish support, and in return are cooperating with Turkish efforts to deal with Turkish PKK Kurdish separatists, who have bases in northern Iraq. While the PKK goal of a separate Kurdish state is popular with most Kurds (even in northern Iraq), the survival of the autonomous Kurdish region in northern Iraq is considered more crucial, for now.

Iraq is producing 3.5 million barrels of oil a day, more than the Saddam ever achieved. Iraqi oil production had been stuck at 2.5 million barrels a day since the 1980s (production had peaked in the late 1970s at four million barrels a day). Iraqi has nine percent of the world's oil reserves, but decades of war and mismanagement had prevented necessary maintenance and construction in the oil fields. For the last few years the oil regions have been safe for foreign oil production companies to bring in their experts, and cash, in to get the job done, so Iraqi production has been steadily increasing. The goal is ten million barrels a day by the end of the decade. The Kurds plan to start exporting 80,000 barrels a day in by 2014, largely with the help of Turkish investors. Kurdish production is currently 120,000 barrels a day. The remaining problem is how to deal with the corruption that has diverted so much oil income into the pockets of thieving politicians and government officials. In Iraq, corruption is like the weather; everyone talks about it but not enough people do anything about it.

 

 

 


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