Oil Divides Iraq Even More

Hopefully I am back, folks.

So, the de facto independence of the Kurdistan Regional Government within Iraq seems to have proceeded considerably further recently, with Ben Lando at http://iraqoilreport.com providing lots of juicy details. These include: 1) The Iraqis are charging that the Kurds have used their military to block Iraqi production in the large Kirkuk oil field, under dispute between the two. 2) Iraqi Oil Minister al-Shahristani has not only declared illegal the 18 or so contracts the KRG has signed with various international oil companies (most of them small and odd minors, except for Hunt Oil of Dallas, Texas, with its deep Bush links), he has now declared these contracts "null and void." The KRG and the companies seem to be ignoring this declaration and proceeding forthwith. 3) Meanwhile, in the absence of a new national oil law for Iraq, the central government is now signing deals under the Saddam-era law, with the de facto approval of the Bush administration. This has led Russia's giant Lukoil to demand rights to proceed to develop the largest oil field in Iraq under an old existing contract from the Saddam era. 4) Two leading KRG oil figures, including their regional oil minister, Ashti Abdullah Hawrami, are making an informal visit to the US, meeting with various influential, but non-governmental figures in Washington and also oil company executives in Houston. 5) The KRG predicts that oil production in Iraqi Kurdistan will be at 1 million barrels per day, equal to about half of overall Iraqi oil production, which has recently been rising somewhat, although still below that of the Saddam era. 6) Saudi production is up about 250,000 barrels per day (this from Econbrowser), which along with Iraqi increases may bode some easing of price pressure in the oil markets.

In any case, it now looks like Iraqi Kurdistan is de facto independent in the most crucial of economic matters from the central government of Iraq. What is partly allowing them to get away with this is that their political parties are part of the ruling coalition, now under severe pressure. So, Iraqi PM al-Maliki is not going to do anything about their oil deals, despite all the declarations of his oil minister.