Iraq’s Kurdistan Regional Government (KRG) defended its barter trade agreement with Turkey signed on Friday. Ankara-based Genel Energy will be the first Turkish company to ship oil directly from Kurdistan to Turkey through a pipeline under the agreement between the Turkish government and the KRG.
Baghdad fiercely objected to the Turk-Kurd trade agreement, with Iraqi Oil Minister Abdul Kareem Luaibi threatening to sue Genel Energy and slash central government’s allocation of 17 percent of oil and gas revenues to the region unless the KRG halts direct oil export to Turkey. (Reuters, 18 January)
The development has far-reaching geopolitical implications. Turkey with its vibrant economy lacks energy and is increasingly dependent on foreign oil imports. The autonomous Kurdish region is oil rich but landlocked. With the agreement with Turkey, it can now ship its oil directly to its neighbor through pipelines. Turkey can be guaranteed that its energy needs are met for the foreseeable future, and Kurdish autonomous government can ensure its economic independence. A Kurdish-Turkish alliance could be a potential geopolitical game changer.
File photo: Oil from Kurdistan could be shipped directly to Ceyhan marine terminal in Turkey. (Iraq Business News)