By Selen Tonkus
ANKARA
With Iraq's central government still locked in an oil export dispute with the Kurdish Regional Government of northern Iraq, Turkey is left with a decision about what to do with almost 1.5 million barrels of stored oil. According to experts, the answer is to use it as leverage against Baghdad.
In November 2013, Turkish and KRG officials signed an agreement that would enable the flow of Kurdish oil from Taq Taq in northern Iraq to the Ceyhan port on Turkey's south-eastern Mediterranean coast. The agreement allowed Iraqi Kurdish oil to be stored and exported at times when no oil is being pumped by the Iraq's central administration.
Baghdad however, says the agreement violates Iraq's constitution because the oil would not be exported by Iraq's national oil company. The KRG did not withdraw its demands, saying that it could never get its 17 percent share from the Iraqi budget.
Currently 1.35 million barrels of oil are stored in Ceyhan, which has a total of storage capacity of 2.5 million, while awaiting Baghdad's approval to be exported, the Turkish Energy and Natural Resources Minister said on March 15.
Irbil and Baghdad have carried out a series of meetings to reach an agreement on the issue but have not yet found a solution. The Iraq constitution states that the country's oil and gas is owned by “the people of Iraq in all regions and governorates.”
Experts told Anadolu Agency that the stored oil strengthens Turkey's hand against both Baghdad and Irbil by signaling the necessity of exporting it at the first opportunity.
"I think that this energy gambit being played by Ankara and the KRG is a larger means for Ankara to leverage Baghdad to make an agreement with the KRG," said Dr. Denise Natali, a researcher at the National Defense University.
She added, similarly, that Ankara can use this crude oil to leverage Irbil to make a deal, because the northern region is heavily dependent upon Baghdad and Ankara for its economic and political survival.
Emphasizing the importance of upcoming general elections in Iraq on April 30, Natali said the oil issue is also an integral part of any deal-making and coalition-building after the elections.
"In the meantime, I see the KRG continuing to truck its crude, smuggle, 'barter' and negotiate deals that will at least permit sales in a non-official way, or that will circumvent state-to-state deals," she said.
Dr. Bilal Wahab of American University (AUS) of KRG's Sulaimania said he does not see any possible solutions until after the elections.
"Concessions to KRG from Iraqi parties could be made after the elections as part of a government formation negotiations. Until then, I only expect more rhetorical escalation between Irbil and Baghdad," he noted.
"The only viable route for KRG crude is Turkey," said Wahab. "It seems that the KRG is being dependent on Turkey as more viable than on Baghdad."
Dr. Fahrettin Sumer of AUS also told AA that the oil agreement between Turkey and the KRG is a win-win project for all parties, including Baghdad.
"I think Turkey’s position is clear on this matter," said Sumer, explaining that Turkey wants Irbil and Baghdad to reach an agreement that complies with Iraq’s constitutions.
Sumer said the issue of the stored oil will eventually be settled by Irbil and Baghdad. "In the meantime, Turkey may have to stop the flow of oil if it reaches its full storage capacity."
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