Mosul, US influence and the Erbil-Baghdad oil deal

According to the Kurdistan Region’s Presidential Chief of Staff Fuad Hussein, the visit to the Iraqi capital by a Kurdish delegation that signed a key oil agreement with Baghdad last week, was made “upon a suggestion from the US embassy in Iraq.”

After months of disputes and two years after Baghdad stopped the Kurdistan Regional Government’s (KRG) 17 percent share of the national budget, last week the two governments managed to agree on a deal to jointly export oil from Kirkuk.

The deal is important financially. But it also grants a glimpse into the extent of US influence over both Baghdad and Erbil, and the timing of Washington’s intervention to ensure the deal took place.

The question that begs an answer is, why now?

One likely factor is the looming battle to liberate Mosul, Iraq’s second-largest city and the Islamic State’s (ISIS) stronghold in Iraq for more than two years. Iraqi Prime Minister Haider al-Abadi has promised to recapture Mosul from ISIS before the end of this year. 

By all accounts, the battle will be fought jointly with Kurdish Peshmerga forces, the Iraqi Army and the US-led Coalition forces. 

“This (oil) deal is in a sense all about Mosul, and probably wouldn’t have happened without the Iraqi Army reaching its new staging ground near Qayyarah,” Patrick Osgood, the Kurdistan Bureau Chief of the Iraq Oil Report, told Rudaw English. 

“The US is absolutely central to the fight against ISIS on all sides, and all sides know it, and so this has given them renewed leverage over oil matters,” he said. 

“And there’s some mutually understood crossover between what’s good economically – especially since the US is providing substantial support to both sides – and what’s good in the anti-ISIS campaign,” he added. 

Despite Washington’s looming hand behind the deal, Osgood doubts that the parameters of the accord were worked out for Baghdad and Erbil by the US.

“I very much doubt that the US was proposing specifics, but instead think the line here was as simple as ‘this is ridiculous, you’re wasting hundreds of millions of dollars.’ And the parties worked out this very simple deal limited to Kirkuk crude. Also, of course, the KRG is desperate for revenue,” he reasoned. 

Nevertheless, US engagement “was a key part of securing the resumption of Kirkuk oil flows into the KRG’s export system,” after months of officials in  both Baghdad and Erbil “constantly emphasizing the wastefulness of the prior re-injection ever since the shut-off in March.”

 

The visit of Brett McGurk, the US president’ special envoy to the American-led coalition against ISIS, and his meeting with the Kurdistan Region’s President Masoud Barzani and Iraq’s National Security advisor Faleh al-Fayyad in mid-August, was really “what pushed this deal forward,” Osgood said. 

But he also thinks it is important to note that the deal is temporary and “is not yet being fully implemented.”

“US influence is finite,” he explained, “which was amply demonstrated when Vice President (Joseph) Biden visited and gave a glowing endorsement of Iraqi Prime Minister Abadi the day before protesters stormed the Green Zone.” 

“The US has tried to push forward a broader energy sharing agreement between the KRG and Kirkuk that has stalled out for what looks like fairly piddling local political reasons, even after Baghdad seems to have given it the nod,” he said.

Also, even though the US managed to broker this short-term arrangement there is still “a massive gap between what the US can broker in the short-term and its ability to help resolve fundamental questions over oil sovereignty,” despite the fact “it is nearing the peak of its re-engagement in Iraq,” he said. 

Dr. Mahmoud Othman, a veteran Kurdish politician and former MP in the Iraqi parliament, has a different outlook on last week’s oil agreement.

“The Kurds have never said ‘No’ to America, and because of that we have suffered damages. My concern is that even after ISIS is defeated the Americans may ask us to withdraw from those areas where we presently are now,” he told Rudaw English, alluding to the so-called disputed territories the Kurdish Peshmerga liberated from ISIS in Nineveh Province. 

“We have listened and followed US suggestions many times without any good result,” he said. “And as the third party Americans are not neutral, they take sides but with Baghdad not us; even in other countries in the region they are more with the central governments, such as Turkey and Syria.”  

Othman says that while in the Pentagon “there are many friends of the Kurds” ultimately the State Department influences US policy and they, he says, are “under Arab and Turkish influence.” 

Disunity among the Kurds themselves, Othman says, is another factor. 

“Only one time the Kurdish delegation has visited the US as a group represented by all parties and in the recent visit to Baghdad the Kurds weren’t united either; they sent separate delegations,” he explained. 

Arif Qurbani, a political analyst and observer, believes that now the US realizes “that this time the Kurds are serious about a referendum on independence,” they are seeking to create conditions which will leave the Kurds with “no excuse to break away from Iraq.” 

“The US aim is to prevent Kurdish independence, and whatever pretext they have, like war with ISIS, they want Iraq to stay as a unified country,” Qurbani told Rudaw English. 

But, he added, the US is also “putting pressure on Baghdad as well to compromise with the KRG.” 

The recent oil deal between Baghdad and the KRG saw Baghdad agreeing that the KRG can continue exporting Kirkuk oil that is under their control, a significant concession on their part. 

Qurbani shares Othman’s view that Kurdish divisions are also a part of the problem. 

“The Kurdish leadership isn’t united and they have no shared vision toward Baghdad and other issues, including self-determination,” he said.

“From now on, I think the US will increase pressure on Baghdad to compromise with the KRG,” he added, reasoning that this will lessen KRG incentive to break from Iraq and become independent.