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Oil seen as real prize of Iran’s Kurdish adventure

Oil seen as real prize of Iran’s Kurdish adventure thumbnail

After helping Iraq stifle a Kurdish push for independence, Iran is now positioning itself to take control of oil exports from the region’s giant Kirkuk field, with the first deliveries expected within days, officials and trading sources said.

FILE PHOTO: Flames emerge from flare stacks at the oil fields in Dibis area on the outskirts of Kirkuk, Iraq October 17, 2017. REUTERS/Alaa Al-Marjani/File Photo

In the weeks since September’s failed Kurdish independence referendum, Iraq has agreed for the first time to divert crude from Kirkuk province, which it retook from the Kurds, to Iran, where it will supply a refinery in the city of Kermanshah.

Iran is locked in a proxy war with its regional rival and U.S. ally, Saudi Arabia. As well as Iraq, it has been extending its influence in Syria, Yemen and Lebanon, raising increasing concerns in Washington and Riyadh.

Under the new arrangement, the first oil will be trucked across the border in the coming days. Initially Iran will receive 15,000 barrels per day worth nearly $1 million, rising gradually to 60,000 bpd, according to Iraqi officials and trading sources.

Baghdad and Tehran have also revived a project to build a pipeline to carry oil from Iraq’s Kirkuk fields to central Iran and onwards for export from the Gulf.

Hamid Hosseini, the Iranian secretary-general of the Iran-Iraq Chamber of Commerce, said Iran want to build a pipeline that can take as much as 650,000 bpd of Kurdish oil for its domestic refineries and for exports.

The pipeline would replace existing export routes for crude from northern Iraq via Turkey and the Mediterranean and would be a blow to Ankara’s hopes of becoming an energy hub for Europe.

It would also be evidence of a U.S. failure to prevent a rapprochement between its ally Iraq and one of its biggest political foes, Iran, which is rapidly regaining influence in the Middle East.

That is in part due to general Qassem Soleimani, commander of the Quds force, the international branch of the Revolutionary Guards, which is also taking a keen interest in Iran’s oil business in Iraq.

Soleimani visited Iraqi Kurdistan in September to warn the region against holding an independence vote. He was also involved in the Iraqi army’s recapture of Kirkuk.

“In Iraq, Iranian forces are working to sow discord as we recently saw in Kirkuk, where the presence of Quds force commander, Qassem Soleimani, exacerbated tensions among the Kurds and the government in Baghdad,” U.S. Senator John McCain said in Washington last week.


“The Kurdish dream of being a big oil exporter is in tatters,” said a source close to the government in Erbil, who predicted that “Iran will be king of the game”.

The Kurds’ bid for independence angered Turkey and Iran, which both have large Kurdish populations and condemned the referendum as destabilizing the region. The United States also called on Kurdistan to scrap the vote.

But it was probably internal Kurdish divisions which doomed the referendum to failure, local political sources believe. Oil was at the heart of this dispute.

The Kirkuk fields were controlled by Iraq’s state oil firm SOMO before being taken over by Kurdish forces in 2014, when the Iraqi army retreated in the face of attacks by Islamic state.

FILE PHOTO: Flames emerge from flare stacks at the oil fields in Dibis area on the outskirts of Kirkuk, Iraq October 17, 2017. REUTERS/Alaa Al-Marjani/File Photo

The Patriotic Union of Kurdistan party (PUK), in Sulaimaniya, then accused the ruling Kurdistan Democratic Party (KDP) party of then President Massoud Barzani, based in the capital Erbil, of not sharing the oil wealth. The PUK wanted to export oil from Kirkuk to Iran.

“We tried to make Barzani accept joint management between Erbil and Sulaimaniya over the fields but he strongly opposed it,” said Sherzad Yaba, a political adviser close to the PUK.

“To put an end to the illegitimate control of the KDP over Kirkuk oil, senior members from the PUK contacted both Baghdad and Tehran and encouraged the Iranians to build a pipeline to export Kirkuk crude through Bandar Abbas port,” said Yaba.

The project lay dormant even though Iraqi oil minister Jabar al-Luaibi and his Iranian counterpart Bijal Zanganeh signed a memorandum on the project in February.

After the referendum, the KDP accused the PUK of striking a deal with Iran to withdraw from Kirkuk, which the PUK denies.

The recapture of Kirkuk was coordinated with Soleimani and left Iraqi government troops in control of half of all Kurdish oil output.

As Kurdish engineers fled the fields, output from Kirkuk was suspended and has remained shut for the past five weeks as Baghdad and Erbil argue over the revenue split.

With output of over 300,000 bpd suspended since mid-October, losses are approaching $1 billion, according to Kurdish industry sources.

To stop the losses, Iraq and the PUK resumed talks with Iran, according to Iraqi and Kurdish officials.

Officials from Iraq’s and Iran’s state oil firms, SOMO and NICO, met last month to iron out details of oil sales to the Kermanshah refinery, the acting chief of SOMO, Alaa al-Yasiri, said.

He also said active discussions were taking place about the pipeline project.


Even though discussions between Baghdad and Tehran have been conducted between oil ministry officials and the Chamber of Commerce, the Revolutionary Guards are poised to step in.

“Any oil transaction between Iran and Iraq should be approved by the Revolutionary Guards, not the oil ministry.” said Reza Mostafavi Tabatabaei, president of London-based ENEXD, a firm involved in the energy equipment business in the Middle East.

Those dealings are overseen by the desk responsible for Iran’s investments in Iraq at the president’s office and are run by the Revolutionary Guards.

The pipeline project will be the Revolutionary Guards’ reward to the Kurds for helping with the recapture of Kirkuk, said Tabatabaei.


12 Comments on "Oil seen as real prize of Iran’s Kurdish adventure"

  1. makati1 on Tue, 14th Nov 2017 5:44 pm 

    Back and forth. Back and forth. Rehash of old news and some guesses.

    Meanwhile, in the US, the drug pushers just added 30 million new customers to their ledgers.

    “30 Million Americans Were Just Diagnosed With High Blood Pressure, Here’s Why…”

    Profits were down, that’s why. Over 24 hours your BP varies all over the chart, depending on what you are doing, your mental state, what you ate/drank, and your age. By their definition, they have seven billion new customers. LOL

  2. Davy on Tue, 14th Nov 2017 5:53 pm 

    widdle g, mad kat is spreading disinformation with Zero Hedge.

  3. shortonoil on Tue, 14th Nov 2017 6:32 pm 

    Sounds like OPEC is heading out the door.

  4. makati1 on Tue, 14th Nov 2017 6:53 pm 

    “FDA Approves New Digital Sensor To Ensure ‘Patients With Mental Health Issues’ Take Their Meds”

    Davy came to mind instantly! LMAO

    “But many are raising the red flag that this could simply be another form of medical “big brother.” You may no longer have the right to refuse medications in the very near future.”

    The American police state is growing fast!

  5. Davy on Tue, 14th Nov 2017 6:56 pm 

    mad kat, you forgot I am on your ignore list or is that now the most comment on one? You never know so I can I? Does the list change when widdle g gives you a bump?

  6. makati1 on Tue, 14th Nov 2017 10:09 pm 

    Sissy, a real war between Iran and the KSA would be disastrous for the West. You can believe that the Straight of Hormuz would be closed on day one and stay closed for the duration. Not to mention missiles on KSA’s oil terminals, pipelines, and refineries.

    Do you think that China is stocking up on oil because they have to fill those empty tanks or because they are preparing for a shortage they see coming?

    The US would lose about 1,000,000 bbls/day from KSA and another 500,000 bbls/day from Russia, Iran’s ally. I’m sure it would affect most of the world in some way, but I did not research all countries. That’s how I see it.

  7. makati1 on Tue, 14th Nov 2017 10:14 pm 

    Creedoninmo, you got it right. The Chinese are driving the bus, not the US. And, when they are ready, they are going to crash it and take down the US in one blow.

    BTW: This would not post under the War article below.

  8. Cloggie on Wed, 15th Nov 2017 4:40 am 

    1979 – Khomeini returns to Iran and Iranians take their country back and stop being a US colony
    1980 – The US wants its Iranian colony back and instigates Saddam to start a war against Iran in the hope to achieve regime change
    1988 – The war ends in a stalemate
    2003 – False WMD-claims and the 9/11-inside job were used as a pretext to invade Iraq in an attempt to add the country to the empire
    2011 – US military essentially thrown out of the country while crying “victory” at the border crossing on the way out.
    2011 – After the debacle with Iran and Iraq, Syria is the next target to become a US colony. Yet again total failure.

    Iraq is now largely an Iranian client state and Syria still is. The Lebanese PM resigned last week in protest over growing Iranian power in Lebanon. What a consolidation of Iranian power! The last time they that far was in the war against Greece, more than 2000 years ago.
    (“300”, 2006)

    In a year or two, Tehran-Baghdad and Damascus can likely plan their “Islamic pipeline” from the Gulf to the Mediterranean after all:

  9. Cloggie on Wed, 15th Nov 2017 5:08 am 

    Look again at the map to verify the desperate situation KSA is now in:

    There obviously is not going to be a pipeline from KSA through Syria. Saudi oil exports are now for half at the mercy of Iran, that controls the Straight of Hormuz and can always shut it off. KSA can currently pump half of its oil (5 mbd) to the Red Sea but not more. KSA is now also under threat from the south (Yemen) in a military campaign KSA started. Houthi missiles can now reach Riyahd airport as was shown recently in a probe.

    Iran, backed by China and Russia, is about to take over the entire ME.

    Next big event in waiting: overthrow House of Saud by Muslim Brotherhood. Once that has happened, SCO more or less controls 74% of the world’s oil and 70% gas:

    And the West will be out of the ME entirely.

    SCO to Europe: you want oil and gas? You do? Let’s have some talks.

    Exit post WW2 West (US empire), not a minute too early.

    And then there is that “shitty little country”, as Israel is known in French diplomatic circles:

    Prospects for the future: ZERO.

    What needs to be done is bulldozer a few tens of square miles in Upstate New York and create a “refuge camp” in case things go really wrong, read after the fall of the House of Saud, when Israel will be totally surrounded by enemies. Europe can airlift Israelis to Upstate New York for the small fee of Israel handing over its nuclear weapons to Brussels. That’s what friends are for.

  10. Hello on Wed, 15th Nov 2017 5:46 am 

    >>>few tens of square miles in Upstate New York

    Better in the desert of Arizona and New Mexico and Texas. There they could be helpful in defending the border. I think they already have experience.

  11. Davy on Wed, 15th Nov 2017 6:38 am 

    “Iran, backed by China and Russia, is about to take over the entire ME.”
    Oh, friggen please, that is like the grand Eurotard army in the making that is now. Iran is a power in the ME but no one owns the ME. The ME is a tar pit of disasters and the more Iran gets involved the worse it will be for them. The same is true for Russia. Russia will be bled of resources there too. The US likewise is just being bled. The dutch guy lives in a fantasy world of what he wants the ME to look like.
    So WTF is your point of your map? Like it is explosive truths we don’t know in a foreign language on a personal WordPress. LMFAO, you are a real card dumb n dutch.

    “And the West will be out of the ME entirely. SCO to Europe: you want oil and gas? You do? Let’s have some talks. Exit post WW2 West (US empire), not a minute too early.”
    Folks, can anyone here help this poor old man with the difference with reality and fantasy. He may need some help with what the future is too.

    “Prospects for the future: ZERO.”
    Yea, based on the fantasy world of one dumb n Dutch guy. Of course it is easy to throw around these kind of statements and great fun to rip.

  12. joe on Wed, 15th Nov 2017 9:56 am 

    Yeah it is interesting that the holding action of arrests recently in Saudi shows that many directly blame MBS for what’s happening in Yemen now likely to result in a famine that will kill millions (kind puts Israels Gaze blockade in the shade), we can only assume that the CIA tipped off MBS to a coup plot against him and are going to support him after they messed up so badly with the failure of the attempted coup against Erdogan in Turkey. Failure has been the watch word for everything the US has done since 9-11 except make the rich richer and the poor die on foreign feilds with injury rates easily comparable with Vietnam and the policy seems to be for every failure, double down.
    Why? Because the US is acting like all empires act, and all empire ultimately collapse because of debt, over extended military, and hubris (in this case hubris caused by devotion to the myth of carrying the flame of morality and decency which arose in the cold war and begun after ww2 as propaganda in reaction to the expansion of US power). Saudi Arabia leadership is foolish and lacking real popularity is almost a carbon copy of Saddam Iraq of the 1980s. They will be used by the US because MBS thinks he is a new Arab hero, some kind of new brave knight, wrapped in silk and brandishing the sword of enlightenment and morality, what a load of hogwash. That guy will end up just like Saddam did, a hated butcher. He has already crossed the Rubicon by arresting his relatives, he probobly can’t go back now, he can only double down, and the US has to go with him.

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