The Politics of Kurdish Crude in Middle East Policy by Denise Natali
The Politics of Kurdish Crude
By Denise Natali, Minerva Chair
Middle East Policy, Vol. XIX, No. 1, Spring 2012
The entry of ExxonMobil into the Kurdish oil market has sent shock waves throughout Iraq’s energy sector and its political classes. The presence of one of the world’s largest international oil companies (IOCs) in the Kurdistan Region not only challenges central government authority but gives the Kurdistan Regional Government (KRG) greater leverage in developing its own oil market. More super-major IOCs are likely to follow, which will further enhance the recognition and financial rewards for the KRG and its business partners.
Still, is the Exxon deal really a game changer? The IOC may be considered “too big to fail,” but can it alter the deep-rooted tensions between Baghdad and Arbil over territory and national identity? At the crux of these disputes are different views of power distribution in the Iraqi state and control over the country’s resources. Baghdad seeks greater authority than the enumerated powers given to it in the 2005 constitution, a document essentially written by the Kurds and some Shias, while the KRG wants as much autonomy as possible. Power struggles have spilled into the petroleum markets. As Baghdad insists on Iraqi oil for Iraqis, the KRG demands Kurdish crude for Kurdistan.
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