As Kurdish President Announces Resignation, Supporters Storm Parliament With Knives And Guns

Iraqi Kurdish leader Masoud Barzani announced his resignation Sunday after the biggest gamble of his 12 years as president of the Kurdistan Regional Government (KRG) not only failed, but utterly backfired as territorial reversals reduced KRG power to its weakest position in decades. Though his push for an independence referendum had overwhelming support among Iraq"s Kurds, and with even the encouragement of some external allies, the decisive military response by the Iraqi national government resulted in rapid forced handover of Kurdish-held oil rich areas and a return to pre-2014 borders, prior to the blitz by ISIS which aided Kurdish political expansion. Barzani will step down effective November 1. 

And now the future of the KRG is itself under threat as reports of inter-Kurdish fighting emerged Sunday night. Multiple international reports characterized Barzani"s speech as "bitter" and it further appears that violence erupted during or after his televised speech before parliament. During the speech Barzani proclaimed that, "three million votes for Kurdistan independence created history and cannot be erased" while also denouncing rivals who abandoned the fight for Kirkuk as committing "high treason."

His supporters, angry at what is essentially a forced resignation after rival Kurdish factions failed to oppose Iraqi national forces as they advanced in Kirkuk and other areas earlier this month, reportedly stormed parliament brandishing knives sticks, and guns. There are also unverified reports emerging that opposition party members were attacked during the chaos, as well as arson attacks on opposition offices in various parts of Erbil. 

According to a statement described as an "urgent message" to the international community from the Speaker of Kurdistan Parliament, Yousif Mohammed Sadiq, we could be witnessing the start of a broader breakdown in security in Erbil: "We are gravely concerned about the attack on Kurdistan Parliament Building today by a number of rioters with utter disregard for all human values and at the encouragement of a political party without any attempt by the security forces to prevent them." 

Barzani supporters storm Iraqi Kurdish parliament as he announces his resignation. There were reports of wounded among Erbil opposition politicians and some media staff on Sunday. 

 

As Barzani steps down, chaos in Kurdistan parliament as a KDP mob attack opposition media by sticks, knife, may attack opposition MPs too. pic.twitter.com/Umt2f4wbwB

— Abdulla Hawez (@abdullahawez) October 29, 2017

A Gorran MP was attacked by unknown individuals for criticizing Barzani during a presser he held at the Parliament moments ago. pic.twitter.com/NAtpyTvNqq

— Rawaz Tahir (@TahirRawaz) October 29, 2017

More people armed with AK47 just arrived shouting “our president is Barzani “ #Kurdistan #Iraq pic.twitter.com/2MHMRJW6rF

— Fazel Hawramy (@FazelHawramy) October 29, 2017

Barzani supporters blame the recent disastrous KRG territorial losses on the Kurdish opposition party PUK, whose fighters generally allowed the previous advance of Iraqi forces after Baghdad ordered the pacification of Kirkuk city. The PUK has admitted that it reached agreement with the Iraqi military even as fighters representing Barzani"s Kuristan Democratic Party (KDP) continued to battle. For this reason the KDP Peshmerga accused PUK factions which refused to fight of “plotting” against the Kurds and committing “a great and historic treason.”

For the Kurds, the non-existent to lukewarm support for the referendum among international powers was the latest (and perhaps greatest) in a long list of historic betrayals. According to Kamal Alam, a Middle East analyst for the Royal United Services Institute the Kurds "overstretched and one cannot help but feel sorry for them" as they were effective fighters against ISIS after the Iraqi army all but disappeared from some parts of the country. 

Alam told BBC World Service radio in an interview late last week, "But they were warned not to do this referendum by both Baghdad and Turkey and they were hoping to capitalize on the disagreements between Ankara and Baghdad, but it seems the referendum brought both the two capitals together to work against Kurdish dominance." And he added "they thought that a hundred year wrong which had been done to them would be corrected and they were perhaps given some assurances in some Western capitals that this time we won"t let you down - you saw loads of Western officials say it and write about it... they have been let down again and now they"ll have to just stay with what they have."

As the Iraqi Kurdish independence project has now resulted in failure, it will be interesting to see how this impacts developments in Syrian Kurdish areas across the Iraqi and Turkish borders - no doubt the example of Iraq has now provided further incentive for the Syrian Democratic Forces (SDF, whose core component is the Kurdish YPG) to go to the negotiating table with Syria and Russia, in the hope of retaining some kind of autonomous or federalized union with Damascus, as opposed to all-out war, which would result in being squeezed by Turkey from the north and Damascus from the south.

Barzani's Failed Kurdistan Project: A Deathblow To The Partition Of Iraq And Syria

Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

The project to divide Iraq was dealt a deathblow by a decision of the Iraqi Prime Minister Haider Abadi to send the Army and the security forces to recover all Iraqi territories controlled by the Kurds of Massoud Barzani. The Kurdish leader was riding the horse of Iraqi partition (in fact, a lame horse) to establish a Kurdish state in the northern part of the country. Following the failure of Barzani’s project in taking advantage of the fight against ISIS and therefore declaring his “state”, every country in the Middle East is abandoning him because no one likes to be associated with failure.

Barzani sent envoys (I personally met some) around the globe who returned with apparently promising results: “over 80 countries promised to recognise the new State of Kurdistan”. These promises turned out to be false (“no friends but the mountains”), other (existing) political alliances turned out to be stronger and Barzani was left alone with his empty promises and unreliable advisers.

Iraq forces in the office of the departed Kirkuk Governor, October 16, 2017. The photo spread widely on social media after Iraqi national forces entered Kirkuk city.

Countries of the region – France, Saudi Arabia and the Emirates to start with – are now establishing a clear and unambiguous relationship with Baghdad’s government. Abadi, following an authorization of parliament, used a fist of iron to fragment the partition project – not only of Iraq – but of the entire region, that was supposed to be sparked off by the Kurds in Iraq and in Syria and via the regime change attempt in the Levant.

In less than 48 hours, the Iraqi army, with all its security services (army, popular mobilization units, Counter-Terrorism, Federal Police), extended its control over Kirkuk, Khanaqin (Diyala), Bashiqa, Makhmour (Nineveh) and Sinjar - the city that leads to the borders with Syria. All territories that were established for Baghdad’s control under the US administrator Paul Bremer in 2003-2004 (with the limits of Kurdistan) are back now in place.

Abadi forced the Kurdish Peshmerga to return to the old areas they controlled in 2003 after they took advantage of the “Islamic State’s” (ISIS) occupation of large Iraqi territories in the north and north-east and north-west of Iraq in 2014.

Most importantly, the Baghdad government has started its recovery of territory (following Kurdistan referendum) from the rich province of Kirkuk – which produces more than 65 percent of Iraq’s northern oil (about 500,000 bpd) - a region which accounts for about 40 percent of Iraq’s total national oil production. Kirkuk includes the oil fields of Tawke, Peshkabir, Atrush, Shaikan, TaqTaq, Khurmala Dome Avana Dome, Bab Jambur, BaiHasan: all were recovered and are now under Baghdad’s central government control.

Thus, by recovering Kirkuk (and its oil fields), Abadi stopped the rise of the “State of Kurdistan”, which cannot exist with the remaining northern oil without substantial financial support from Baghdad to pay the salaries of the army (Peshmerga) and official employees, and this as long as Erbil delivers the full production of oil: in exchange 17% of its revenue will be due to Kurdistan. Massoud Barzani will have to withdraw from the political scene because he will be unwilling to beg for the return to the archaic relationship with Baghdad government and obey the Prime Minister- this might prove just too humiliating.

Pavel Talabani, the son of the Iraqi ex-President Jalal Talabani, declared that the Kurdish army in the eastern regions of Khanaqin-Sulaymaniyah was under the command of the commander-in-chief of the armed forces, the Prime Minister Haider al-Abadi, thus taking his distance from Erbil, further isolating the Kurdish Leader Masoud Barzani: who is in fact the biggest loser today in Iraq.

The first to abandon Barzani was Turkey, which has announced that it will close its border (after days of hesitation awaiting the concrete results of Massoud’s separatist rejection of biding by the constitution and Baghdad’s reaction to it) with Kurdistan and handed over the main crossing point between the two countries to the central government in Baghdad and its forces. Saudi Arabia followed immediately with direct contact with King Salam, who offered his congratulations to Abadi and rejected Barzani’s rebellion.

With the collapse of the Barzani project, the United States had much less hope than before of pushing Syrian Kurds towards independence from Damascus. Baghdad has regained control of the crossings between Iraq and Syria in Sinjar – Rabi’a. Two more crossings remain outside of Baghdad’s control: Tanf under US control temporarily and al-Qaem under ISIS. This means no support, no exit and no entrance will remain legally available to the Syrian Kurds. The new situation will lock down the airspace from Syrian al-Hasaka which is surrounded by Turkey in the west, by the forces of Damascus in the south and by the regular Iraqi forces in the east.

Nope. Recent events dealt a deathblow to partition:

The Sykes-Picot agreement, which divided the Levant in the wake of World War I, was revived after analysts and diplomats called for the redrawing of the borders of the Middle East region, especially Iraq and Syria, the creation of a new state called Kurdistan (Iraq and Syria), a new Sunnistan (for Sunni in Anbar-Iraq and Idlib – Syria) and Shiistan in south of Iraq.

Turkey has begun to review its policy with Iraq and it will certainly find common ground with Baghdad so that it withdraws its troops from Bashika and other areas now that Abadi has showed his teeth against Erbil’s decision and his willingness to wage war against those who want to divide Iraq (and without considering the cost).

The attractive commercial relationship, that has been at the centre of the attention of President Recep Tayyip Erdogan, will prevail, and will encourage Iraq and Turkey to re-establish good neighbourly relations ( Turkish-Syrian relationships will certainly follow after the war ends in Syria).

The US will be forced today to reconsider its presence in the north-east of Syria because such a presence has now become meaningless. The US forces are stationed in al-Tanaf without any strategic purpose and in al-Hasaka/Raqqah with the Kurds, whereas ISIS has been defeated in its Syrian capital. In fact, it is possibly easier for its own proxies – the Syrian Kurds – to give up this alliance in time, before this same US drops them. Kurdish interests don’t lie with Washington but with Damascus, ready to establish a constructive dialogue with them if they stop being seduced by the US’s temporary interest in the Levant.

And lastly, Haider al-Abadi gave himself the political impetus he had missed in recent years. Yes, Iran played a key role in warning Masoud Barzani, a day before the start of the Iraqi operation to recover all territories from the Peshmerga: the commander of Iran’s Revolutionary Guard Qasem Soleimani alerted Barzani to the gravity of the situation (but in vain). He pressed the Iranian-Talabani ally to stand down and take distance from Barzani, and to support Abadi in countering Kurdistan’s “partition plans”.

But it was Abadi’s final decision to act. He rendered a huge service to Syria and to his own country. Abadi has secured himself a strong place in the Iraqi political arena and the upcoming elections as a Prime Minister for a second term. It will be very difficult to compete with him, he who destroyed ISIS but, above all, the “hero” who exploded the biggest danger of all: the partition of Iraq … and Syria.

Iraqi Kurd Army Agrees To Return To 2003 Border, Oil Slides

In a dramatic de-escalation of recent hostilities in Iraqi Kurdistan, where in a blitz campaign the Iraqi army was able to recapture Kirkuk , effectively regaining control of the oil-rich region, the Kurdish Peshmerga forces, i.e. the army of the autonomous region of Iraqi Kurdistan told Sky News Arabia that it has agreed to return to the 2003 Iraq border, which if confirmed would be a major concession to Iraq which has been pushing for just this conclusion for the past month.

The opportunistic Kurdistan Regional Government increased its territory by at least 40% during the war with Islamic State, bringing many of these disputed areas under its control after the Iraqi army withdrew in the face of advancing ISIS militants. However, as Iraqi forces and pro-govt militias have already regained control of many of these areas, including Kirkuk, over the past 48 hours, the Iraqi Kurdistan region had no other choice. According to the Kurdish news service Rudaw, the pre-2003 borders "exclude disputed areas such as Kirkuk, Khanaqin, Tuz Khurmatu, Makhmour, and Zumar from the Kurdistan Region."

Incidentally, at the start of September, Rudaw reported that Baghdad wants the Kurdistan Region to withdraw from disputed areas and return to pre-2003 borders between the autonomous region and Iraq, said Kurdistan President Masoud Barzani. At the time Barzani vowed that the Peshmerga will not retreat from any areas that were taken "with the blood of fallen soldiers." It took one month for him to change his tune.

Barzani said at the time that the planned independence referendum can work as a peaceful tool to settle outstanding issues between Erbil and Baghdad. In retrospect it turned out to be an epic disaster for the Kurdish autonomous region, which is about to lose a substantial portion of its territories.

Meanwhile, the Iraqi recalamation of Kirkuk appears to have gone without bloodshed, with US Coalition forces stating that aside from one incident of "miscommunication" no further reports of armed conflict between ISF-Kurdish Peshmerga.

Coalition: Aside from one incident "miscommunication" no further reports of armed conflict between ISF-Kurdish Peshmerga. #Kirkuk @CJTFOIR pic.twitter.com/fZnBn5UmA5

— Rudaw English (@RudawEnglish) October 17, 2017

If Sky News Arabia is confirmed, it would imply that a major geopolitical risk factor, and a potential upside catalyst for oil prices, has been eliminated. Tangentially, earlier today Goldman released a report called the "return of oil"s geopolitical risks" in which it claimed that "Geopolitical risks to the oil market have continued to intensify, with Iraq’s military seizing oil fields formerly controlled by the Kurdistan Regional Government (KRG) yesterday, Monday, October 16 and President Trump decertifying the Iranian deal on Friday."

Well, at least half of these risks may now have been resolved, and if so expect the price of oil to react appropriately, which it is indeed doing...

Finally, Masoud Barzani, president of the autonomous Kurdish Iraqi region, issued the following statement on Tuesday:

Salahadin, Kurdistan Region of Iraq, (Krp.org)- President Masoud Barzani issued a statement today regarding the recent events in the Kurdistan Region which commenced with the attack on the city of Kirkuk in the hands of the Iraqi Popular Mobilization Forces.

The statement begins by referring to the fact that the people of Kurdistan have throughout history been oppressed and have lived with injustice. This injustice and this oppression have stemmed, the President says from the Kurds" defense of their identity. They have been, he adds, subjected to genocide and mass murder, the most recent of such atrocities was in the hands of the terrorists of the Islamic State. The statement reminds the people of Kurdistan, Iraq and the world that in spite of these atrocities, the people of Kurdistan have always been against waging wars and have worked in pursuit of peace.

In reference to the recent events in Kirkuk, the President states that some people from a certain political party had unilaterally paved the way for such attack whose result was the withdrawal of the Peshmerga forces from Kirkuk. 

The statement reassures the people of Kurdistan that all of the resources of the Kurdistan Region will be allocated for the security and stability of the Kurdistan Region.

President Barzani calls upon the political entities of the Kurdistan Region to work towards unity. He also commends the endurance of the people of the Kurdistan Region. He also calls upon all of the media outlets of the Kurdistan Region to work responsibly during these arduous times facing the people of the Kurdistan Region.

The President concludes the statement by saying that those who paid the ultimate sacrifice for Kurdistan have not been lost in vain, and the same shall be true for those who voted for an independent Kurdistan.

After Lightning Offensive, Kirkuk Is Now Fully Under Iraqi Military Control

Iraq"s military has effectively gained control of major assets and government buildings in Kirkuk city, and is now set to fully pacify it after overnight clashes at a moment when oil prices rose toward a six month high as the conflict now threatens output.

Iraq’s elite U.S.-trained Counter-Terrorism Force has taken over the provincial government headquarters in the center of Kirkuk after operations to seize the city from Kurdish forces began overnight - the contested city is now reportedly under the control of Iraqi national forces. Some of the first footage Western audiences woke up to Monday morning were of (ironically enough) US supplied equipment - including tanks, being used to bulldoze images of Iraqi Kurdistan President Masoud Barzani. Iraqi forces have further pulled down Kurdish flags flying over government buildings throughout the city, while leaving the Iraqi flag flying.

Image source: Rudaw

The Iraqi advance on the oil-rich and ethnically diverse previously Kurdish-held city was lightning fast and largely without a major fight - aided by the fact that some Kurdish Peshmerga fighters fled their posts as national militias advanced, which is a reflection of Iraqi Kurdistan"s own political divide: one faction within the PUK Peshmerga (Patriotic Union of Kurdistan) is relatively pro-Baghdad, making the Iraqi advance easy in sections of the city held by the group.

And though Kurdish media frequently highlighted footage of armed civilians taking to the streets Sunday and Monday, the city"s large Turkmen population as well as the up to 20% Arab and Assyrian population generally fears and rejects Kurdish dominance over the region.

US-supplied Iraqi tank knocks over a picture of Barzani in Kirkuk #Iraq pic.twitter.com/4g0n1qi2AU

— Michael Horowitz (@michaelh992) October 16, 2017

The Kurdish opposition party PUK, whose fighters allowed Iraqi forces to enter parts of the city, confirmed Monday that it allowed the breach after reaching an agreement with the Iraqi military even as fighters representing the governing Kuristan Democratic Party (KDP) continued to battle. A Peshmerga spokesman, however, warned that the  “government of Abadi bears the main responsibility for triggering war on the Kurdistan people, and will be made to pay a heavy price.” The Peshmerga further accused those PUK factions which refused to fight of “plotting” against the Kurds and committing “a great and historic treason.”

Photo-posted by local reporters- of a mass exodus from Kirkuk to Erbil as pro Iranian militias are advancing on the city. To be confirmed pic.twitter.com/x94bYbKDhT

— Walid Phares (@WalidPhares) October 16, 2017

A PUK Peshmerga commander, Wista Raool, told the New York Times that his party seeks the return of contested oil fields to the federal government:

Mr. Raool accused Mr. Barzani and his party of “stealing” the oil from the Iraqi government. Many members of the P.U.K., which maintains its own pesh merga force, opposed the referendum vote because it was led by Mr. Barzani.

But northwest of Kirkuk city, Kurdish fighters defending oil fields administered under Barzani"s KDP party vow to never surrender to the Iraqi army or its Shiite paramilitary forces:

The commander of forces there, Kamal Karkokly, said in an interview at his command post Sunday that his fighters would not surrender their positions. 

“We have enough weapons,” Mr. Karkokly said. “We can fight as long as we have to.”

Though oil production continued without interruption throughout the end of last week and over the weekend, even as reports of fighting south of Kirkuk surfaced, Reuters reported early Monday some 350,000 barrels per day (bpd) of production was temporarily shut down from major fields Bai Hassan and Avana due to security concerns as Iraqi forces entered Kirkuk. This helped spur a jump in world oil prices Monday, and markets remain unsettled. Kirkuk oil fields produce 10% of Iraq"s total output. However, Kurdish officials are now disputing that the KRG (Kurdistan Regional Government) ever gave the order to halt production:

The Kurdistan Region’s Ministry of Natural Resources (MNR) on Monday denied rumors of oil production being shut down following the recent violence in Kirkuk Province.

Ashti Hawrami, MNR’s minister of natural resources, ordered the resumption of full production from oil fields in Kirkuk after a brief interruption.

Meanwhile, a senior Baghdad oil official told Reuters after Iraqi forces entered the city that, “We’ve got confirmation from military commanders that it’s a matter of a very short time,” and added, "our brave forces will regain control of all Kirkuk oil fields and then we will restart production immediately.”

This morning, the US embassy in Baghdad issued a statement calling for calm on both sides, and reiterating the common cause of fighting ISIS:

We support the peaceful exercise of joint administration by the central and regional governments, consistent with the Iraqi Constitution, in all disputed areas. ISIS remains the true enemy of Iraq, and we urge all parties to remain focused on finishing the liberation of their country from this menace.

Ironically, the US has given military aid to both sides which were previously partners in anti-ISIS operations, which is why US equipment is increasingly appearing on either side of the firefights.

Casualties Reported After Iraqi Troops Enter Oil Rich Kurdish City Of Kirkuk; Oil Spikes

In a major escalation involving the disputed Iraqi Kurdish region, which last month declared independence following a referendum which was not recognized by any of its neighbors or Baghdad (in fact, only Israel has supported the legitimacy of the Kurdish referendum to date) Iraqi state media reported that on Monday morning Iraqi federal troops entered territories occupied by the nation’s Kurds, with the FT confirming that Iraqi forces moved to enter the city of Kirkuk. The Iraqi advance comes three years after Kurdish militias seized the areas outside their autonomous region as a pretext to defend against an advance by the Islamic State extremist group.

Al-Iraqiya TV said the military, anti-terrorist units and federal police have taken control of "vast areas" around the oil-rich city of Kirkuk which has long been one of the country’s deepest faultlines, claimed by both Erbil and Baghdad. While the TV report said the Iraqis advanced without firing a shot and "without opposition from Kurdish Peshmerga", unconfirmed social media reports suggest that at least one peshmerga has been killed in the fighting:

First casualty in Kurdish, Baghdad/militia fighting around Kirkuk. https://t.co/GWx5LYzy1E

— Samuel Oakford (@samueloakford) October 16, 2017

Separate twitter reports showed fighting in the southern part of Kirkuk in line with reports of clashes breaking out between Iraqi forces and Perhmerga:

Yet another explosion in Duz Xurmatu right now. pic.twitter.com/H5KnoDeKQA

— Afarin Mamosta (@AfarinMamosta) October 15, 2017

A Rudaw report of heavy gunfire was also captured on Twitter:

Heavy gunfire live on Rudaw on the outskirts of Kirkuk #Iraq pic.twitter.com/yPpjvf0PY5

— Fazel Hawramy (@FazelHawramy) October 15, 2017

Additionally, the FT writes that Najmaddin Kareem, Kirkuk’s governor, was shown on pro-Kurdish channel Rudaw urging the people of the city to take up arms in its defence. Assuring that further bloodshed appears inevitable, Hemin Hawrami, a senior adviser to Masoud Barzani, KRG president, told the Financial Times that the peshmerga forces would defend the city.

“We have orders, if they come close, all Peshmerga forces will respond very strongly,” Hawrami said. He added that the KRG president had held talks on Sunday with Muhammad Fuad Masum, the Iraqi president, that aimed to resolve the stand-off, saying that it sought “peace and dialogue”. “It seems that Iraqi government and PMF (Popular Mobilisation Forces) made their decision to launch the offensive without even waiting for President Masum to go back to Baghdad tomorrow to take our proposals for talks,” Mr Hawrami said.

"Iraqi forces and Popular Mobilisation are now advancing from Taza, south of Kirkuk, in a major operation; their intention is to enter the city and take over [the] K1 base and oilfields," said the Kurdistan Regional Government (KRG) Security Council.

As Reuters adds, citing Lieutenant Colonel Salah el-Kinani of the Iraqi army’s ninth armoured division, the aim was to take the K1 air base, west of Kirkuk.  Iraqi forces had gathered to the south of Kirkuk in recent days threatening to reclaim a city they had fled in 2014 after Isis militants captured nearby Mosul. The KRG’s peshmerga fighters have held the city for the past three years but its inclusion in last month’s independence referendum, where Kurds voted overwhelmingly to leave Iraq, has enraged Baghdad, and drawn strong opposition from Iran and Turkey.

The AP adds that, for now at least, a commander of the local Kurdish police force said Kurds remain in control of Kirkuk province’s oil wells. That may change very soon if Iraq has indeed sent troops to reclaim the local oil infrastructure.

Earlier in the day, Iraqi Kurdish media accused Iran of closing most of its border as its leaders met to discuss rocky relations with Baghdad, to pressure them into making concessions to the central government. As Zero Hedge reported earlier in the day, in an unexpected diplomatic turn of events which underscores the seriousness of escalating tensions between the Iraqi government and the Kurdistan Regional Government (KRG), the head of Iran"s elite Revolutionary Guard (which last week were designated by the US as a terrorist organization), General Qassem Soleimani, arrived in Erbil on Sunday and met with Kurdistan regional president Masoud Barzani to discuss the growing crisis at a moment when Kurdish Peshmerga forces were blocking Iraqi Army access to Kirkuk oil fields and military installations

As a result, Iran and specifically its Shia militias appear to be also involved: according to the FT, there are fears among Kurdish officials of the involvement of Shia militias, such as the PMF, in the advance. They have played a critical role in ending Isis rule in Mosul but have made a series of threats to the KRG in Kirkuk in recent days.

Qais Khazaali, the head of one of Iraq’s most powerful Iranian-backed Shia militias put out a statement on Twitter: “We all stand with our heroic forces in implementing the orders of the general commander of the armed forces and the decisions of parliament for the state to regain control over areas overtaken [by the KRG].”

The autonomous Kurdish region exports about 550,000 barrels a day of crude oil, including from fields operated by the federal North Oil Company.

Following news of armed clashes in the oil rich region, oil prices jumped more than 1 per cent in early Asian trading, with Brent crude oil hitting $57.76 a barrel.

For those trading oil overnight, here is a live feed from Kirkuk:

Iran, Iraq, And Turkey Unite To Block Kurdish Oil Exports

Authored by Zainab Calcuttawala via OilPrice.com,

Iraq, Iran, and Turkey are taking a unified stance against Kurdistan’s oil sector after the region elected to seek independence from Baghdad in a referendum in September, according to a new report by Rudaw.

“In the case of northern Iraq; Iran, Iraq and Turkey will form a tripartite mechanism and will decide on shutting down the oil,” Turkish President Recep Tayyip Erdogan said after a meeting with leaders from the other two nations on Thursday.

A day before the vote, the Iraqi central government issued a statement calling on “neighboring countries and countries of the world” to stop buying crude oil directly from Kurdistan and only deal with Baghdad.

Turkey’s Ceyhan port provides an outlet for the Kurdish Kirkuk oil to meet international markets without interference from Baghdad. Erdogan, Tehran and other members of the international community had censured Erbil for proceeding with the independence referendum as Iraq recovers from a three-year war against the Islamic State (ISIS). The Turkish leader had previously threatened to cut Kirkuk off from Ceyhan, but did not provide details on how such a measure would be carried out.

Russia’s oil majors side with Kurdistan in its quest for an independent fossil fuel establishment. Rosneft signed off on a $1 billion gas pipeline deal with the Kurdistan Regional Government (KRG) a week prior to the historic vote, signaling Moscow’s approval of a hypothetically separate Kurdistan.

Both Iran and Turkey house sizeable Kurdish populations, so the referendum raises fears that Kurds from other nations may seek similar political solutions.

Kurdistan produces around 600,000 bpd of crude oil, or about 15 percent of Iraq’s total output. After the votes were counted, the KRG said that the ‘Yes’ to independence option won at the polls, with 92.73 percent of voters opting to grant Erbil its own regime.

Iran Deploys Tanks To Border With Iraqi Kurdistan

Days before last week"s Kurdistan referendum, Iran took steps to isolate and punish the Iraqi Kurdistan region and the government in Erbil (KRG). This included closing Iranian airspace to northern Iraq"s two international airports and sending Iran"s elite Revolutionary Guard forces to conduct drills along the northwest border with Kurdistan, but in the early hours of Monday Iran dramatically escalated its military build-up along the border by deploying dozens of tanks supported by artillery - this according to a Kurdish government official and Iranian state television.

The Kurdish official confirmed the tank build-up, saying "The tanks can be seen from the Kurdish side.” And Iranian state TV on Saturday indicated that Iran and Iraq would cooperate in joint drills and the establishment of heightened border security, to the point that Iran would "receive Iraqi forces that are to be stationed at border posts”.

#Iran|ian military drill on Kurdistan Region border (Haji Omaran Crossing Border) despite business being conducted as usual.#TwitterKurds pic.twitter.com/UCrL1HPXvl

— Kurdistan 24 English (@K24English) October 2, 2017

Iranian government officials had warned just prior to last week"s referendum that, “The republic of Iran has opened its legitimate border gates on the premise of the consent of the federal government of the Iraqi state. If such an event [referendum] happens, these border gates from the perspective of the Islamic Republic of Iran would lose its legitimacy." It appears Iran is now making good on its threats as it worries that an independent Kurdistan at its border would be a destabilizing force concerning Iran"s own sizable Kurdish minority.

Last week multiple videos and images surfaced in Iranian social media purporting to show Iranian state police and security forces deploying to the Kurdish towns in Iran"s north. Multiple reports indicate pro-Kurdistan demonstrations took place in various Kurdish Iranian towns in response to the Erbil government"s referendum, something strictly banned and thus a rarity in the Islamic Republic. Iran"s Kurdish population numbers over 6 million out of a total population of about 80 million people - most of which are concentrated in a northwest strip of land which runs along the border with Iraqi Kurdistan as well as in a small northeast pocket.

#Kurdistan:1000s of Iranian police forces have arrived in the city of #Mahabad after Kurds in the region celebrated the #KurdistanReferendum pic.twitter.com/GoH17RTWso

— Thomas van Linge (@ThomasVLinge) September 27, 2017

Kurds in the #Iran-ian Kurdish city of Baneh (Bana) celebrate in support of the #KurdistanReferendum on independence.#TwitterKurds pic.twitter.com/mMQiGuFW3i

— Kurdistan 24 English (@K24English) September 25, 2017

According to Iraqi Kurdish network Rudaw English, Iran launched a major crackdown with dozens of arrests reported in Iran"s northwest region in the days following the referendum:

Two Iranian Kurdish political parties and a human rights watchdog all reported “scores” of arrests after thousands took to the streets in Kurdish cities of Iran chanting Biji Kurdistan, long live Kurdistan, and waving Kurdistan flags to celebrate the success of the independence referendum next door. Flying the Kurdistan flag and singing the national anthem are forbidden in Iran. 

Iranian intelligence and security forces have set up a joint command center “for the purpose of identifying and arresting the organizers of the demonstrations,” the Democratic Party of Iranian Kurdistan (PDKI) stated. They are reportedly analyzing video footage of the gatherings. 

Furthermore it appears that Iranian TV sent a message to its broader Kurdish population indicating that all activities were being monitored by authorities:

The Kurdistan Human Rights Network (KHRN) reported that Iranian police were closely monitoring the demonstrations that attracted rare attention in the country. “Iranian state television on Tuesday acknowledged the rallies, a rarity in the Islamic Republic broadcast,” the group stated. 

As we previously explained, the Kurdish referendum pushed Iraq into the arms of Iran when the relationship between the Iraqi Prime Minister Haidar Abadi and Iranian officials was at its lowest level. But after the KRG"s insistence on pushing forward with moves toward independence, Abadi sees in Iran the only sincere partner to count on, and can rely on the Iranian Army and Revolutionary Guards Corps (IRGC) in the case of any military escalation against Kurdistan, particularly in the disputed Iraqi cities, with Kirkuk at the top of the list.

Map source: Iran Times

Baghdad is confident that Iraqi Kurdistan President Masoud Barzani didn’t take this step without a blessing from the Americans, despite official US opposition to the referendum. It seems Washington decided to swap its relationship with Baghdad with that of Erbil because it won’t be able to support both at the same time.

Supporting Erbil is more attractive to the US and its regional allies (particularly Saudi Arabia), in the hope that the Kurdish Iraqi move would trigger the appetite of the Kurdish Iranians (and the Syrian Kurds who are already on this same path). If this happens and we observe an uprising in Iran, which the Saudis would certainly support, the Iranian economy and that of the government of Baghdad will both be under severe pressure.

Iran supported Barzani in 2014 and provided him with weapons (at a time when the US was denying any support to Iraq, during the 6 months after the fall of Mosul in 2014), but it is today in an undeclared war against Erbil, fully behind Baghdad’s measures and supporting future escalation and punitive steps.

Why Despite Threats, Turkey Won't Impose Sanctions On Kurdistan After The Referendum

Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

High-ranking sources in Kurdistan (Erbil) said that the Kurdish leader Masoud Barzani “expected the sanctions already announced by Baghdad and expects many more sanctions to come in the future”. Nevertheless, “the referendum was an essential step to undertake,” otherwise Barzani would no longer be considered the Kurdish leader.

“We are not afraid of Turkish sanctions because Ankara would lose more than it will gain if the common borders are closed. The Turkish representative promised us (months before the referendum) that harsh political measures will be adopted against Kurdistan but that no economic sanctions would be seriously considered. After all it is up to Turkey to stop sending its oil tankers to recover our oil production at a cheap price if Erdogan considers it a practical move within his own economy,” said the source.

Good morning! We see no disruptions in KRG crude oil exports out of the Turkish port of Ceyhan as today there are two tankers loading. #OOTT pic.twitter.com/BzTj1eGf0W

— TankerTrackers.com???? (@TankerTrackers) September 29, 2017

In past 5 days. 553K barrels of KRG oil departed daily from the Turkish port of Ceyhan for Croatia, Italy & Israel. Normal activity. #OOTT pic.twitter.com/lidVIK6DSg

— TankerTrackers.com???? (@TankerTrackers) September 29, 2017

The Erbil leadership knows that the Kurds lived through hunger and genocide throughout the years, sometimes living in the mountains for decades. Therefore, although any threat to their existence won’t be taken lightly, it cannot affect the process of independence that has been put on their desired track. The Kurdish leaders will agree to allow Baghdad to control airports (Erbil and Suleymaniyeh) as requested by Prime Minister Haidar Abadi, and would like to reestablish good neighbor relationships with all surrounding countries, particularly since the declaration of independence may require two or three years to put into concrete effect.

The 1800 km long borders between Kurdistan and the rest of Iraq will force Erbil to send more Peshmerga troops to reinforce its security all along its borders and especially in disputed areas. However, for many countries the referendum has created embarrassment and reshuffled many of the alliances in the Middle East: the implications of this have yet to be considered. It is Turkey that will be holding the key to the success or failure of a new “state” in the Middle East: Iraqi Kurdistan.

A pipeline network connects Iraq’s northern oil fields to the Turkish port of Ceyhan. Image source: Anadolu News Agency.

Turkey, a summary of its role in the recent history of Syria and Iraq:

• Turkey supported the uprising of Sunni tribes in 2014 when these metamorphosed into the “Islamic State” (ISIS) terror group. Ankara didn’t ask its consulate diplomat to abandon the diplomatic mission, and so the diplomatic staff became prisoners in ISIS’ hands, to be later exchanged with hundreds of mujahideen and their families held by Turkey.


• Ankara allowed the Iraqi Peshmerga to cross its territory into Syria to help the YPG (the Syrian branch of Turkey’s most sworn enemy: the PKK) and recover Ain al-Arab (Kobane) from ISIS in the north of Syria.


• Turkey opened its borders to Jihadists from al-Qaeda and ISIS under the excuse of “bringing down the Syrian regime of Bashar al-Assad”.


• Turkey brought down a Russian jet while bombing jihadists along the Syrian borders, pushing Moscow to heavily engage in the Syrian war and give the upper hand to Assad.


• Turkey allowed al-Qaeda and the foreign fighters of the Turkistani group to occupy the bordering city of Kessab. The city was later recovered but Ankara created another military balance by expulsing from its territory of thousands of members of al-Qaeda who then occupied the city of Idlib, today the center of al-Qaeda in Syria (also known as Hay’at Tahrir al-Sham).


• Turkey asked its Syrian proxy to pull out of the city of Aleppo, rendering its liberation easier and less costly for the Syrian Army and its allies, which marked a real turning point in the war in Syria.


• Turkey joined the de-confliction negotiation in Astana (Kazakhstan) after reconciliation with Moscow and the return to normal relations between both countries.


• Turkey moved its forces into Syria to stop the creation of a Kurdish “state” known as “Rojava” (from al-Hasaka to Efrin) and disrupted a Kurdish Syrian access to the Mediterranean that could have been also used in the future for the Iraqi Kurds in case of sanctions against Iraqi Kurdistan.


• Turkey considered Iran a “terrorist state sponsor” but kept its diplomatic relationship with Tehran. It increased economic exchanges and fully collaborated with Iran in Astana as partners and guarantors in Syria.


• Ankara did not hesitate to support the Iraqi Kurds in order to enjoy economic advantages, and to keep its forces in the north of Iraq. Despite many attempts by Baghdad to remove the Turkish troops, Ankara rejected all demands and hid behind “the Kurdistan request” so as to maintain several hundreds of officers and soldiers in Iraq.


• Turkey is not expected to implement any economic sanctions against Erbil despite Erdogan screaming, “the Kurds will go hungry”. There is no doubt, however, that Turkish officials will continue launching verbal attacks against Barzani but doubt remains about economic sanctions and the cessation of oil purchases.

To sum it up: President Erdogan declared war on the Syrian Kurds but prevented them from losing Kobane; declared war on Assad but supported him to recover Aleppo; declared war on terrorism but allowed ISIS and al-Qaeda to enjoy all support from Turkey and bought oil from ISIS; threatened the Iraqi Kurds but still bought their oil while keeping its hundreds of trucks queuing up on their borders; promised to keep al-Qaeda under control in Idlib during the last Astana meeting, but allowed it to launch military offensives afterwards.

It is obvious that the Iraqi Kurds are aware of Ankara’s unstable and continuously changing of policy, very confident that any other measures by surrounding countries (Iraq and Iran) can be easily overcome in the future, as long as Erdogan is offering alternatives. The cost is that the Iraqi Kurds fall into Ankara’s hands and control, but it looks like Barzani is happy with this outcome: as long as he has his new state, pushing its place onto the Middle East map, right in the middle.

Iran and Iraq

The Kurdish referendum pushed Iraq into the arms of Iran when the relationship between Iraqi Prime Minister Haidar Abadi and Iranian officials was at its lowest level. Today Abadi (and most Iraqis) sees in Iran the only sincere partner to count on, and can rely on the Iranian Army and Revolutionary Guards Corps (IRGC) in the case of any military escalation against Kurdistan, particularly in the disputed Iraqi cities, with Kirkuk at the top of the list.

Baghdad is confident that Barzani didn’t take this step without a blessing from the Americans, which is expected to become more visible in the coming months, according to Iraqi officials in Baghdad. It seems Washington decided to swap its relationship with Baghdad with that of Erbil because, apparently, it won’t be able to support both at the same time.

Supporting Erbil is more attractive to the US and its regional allies (particularly Saudi Arabia), in the hope that the Kurdish Iraqi move would trigger the appetite of the Kurdish Iranians (and the Syrian Kurds who are already on this same path). If this happens and we observe an uprising in Iran (the Saudis already promised to support any unrest in Iran), the Iranian economy and that of the government of Baghdad will be both under severe pressure.

Iran supported Barzani in 2014 and provided him with weapons (at a time when the US was denying any support to Iraq, during the 6 months after the fall of Mosul in 2014), but it is today in an undeclared war against Erbil, fully behind Baghdad’s measures and supporting future escalation and punitive steps.

No one can wind back the clock to before the Kurdish referendum. However, it is still possible for Barzani to avoid contributing toward a further mess in this increasingly reshuffled Middle East. He could indeed consider all these issues as an unnecessary concern, similar to a "storm in a tea cup". Unfortunately, it seems the Kurdish leader is determined to continue his path, denying any immediate intent for concrete realization of independence, yet without excluding it.

"A Dangerous Move": Masoud Barzani Either Burned Or Paved The Way For The Syrian Kurds

Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

The decision of Kurdistan Regional Government (KRG) leader Masoud Barzani to hold a referendum for Kurdistan independence will define the future of the Kurds in north-east Syria. The international community (headed by the US with numerous military bases in Syria) is directly concerned with the reactions, verbal threats, and measures announced by the countries with a Kurdish majority and bordering Iraqi Kurdistan, i.e. Turkey, Iran, Syria and Iraq.

So far Tehran, Ankara and Baghdad have reacted harshly to the Iraqi Kurds’ unilateral wish to divide the country, but Iraq and Iran took the first measure by closing their air space to all flights from and to Erbil. Iraq asked all airlines to stop flying over the country and to cease using Erbil airport. Lebanon abided by the Iraqi central government request and halted all flights in and out of Erbil (flights scheduled daily in the normal situation). Egypt and the Emirtes followed Lebanon’s step. Turkey is increasing its threats (“the Kurds will go hungry”) but did not take any practical steps: scheduled flights from Turkey to Erbil are landing and taking off despite what Turkish officials otherwise declared, but above all, its trucks are still travelling backward and forward into the Kurdish territory.

Kurdistan President Masoud Barzani (left) and Iraq PM Haider al-Abadi (right)

Baghdad went a lot further when its Prime Minister Haidar Abadi was given full power by the government and the Parliament to take “all necessary measures”, including the use of military force, to ensure the unity of the country. This is what encouraged Haidar Abadi to give an ultimatum to Erbil to deliver the control of all airports and border crossings to the Federal Police, as stated by the constitution. This means that the central government is expected to increase sanctions against Kurdistan by this coming Friday and may use military force to impose control over all contested areas in the north, north-west and east of the country. Any such move will inevitably spark violence in the country and an immediate revelation of the International community’s real intention towards Erbil and Baghdad. The US and Europe have large business, oil, and military intelligence bases in Kurdistan and would be directly concerned.

A delegation from Kurdistan visited Baghdad a few days before the announcement of the referendum. Iraqi Sources in Baghdad who participated in the meeting reveal to me “the Kurds came with three clear intentions: 1. To show the world the Kurds are trying to find a way out before the referendum. 2. It is important to continue the dialogue and avoid any repressive measures after the referendum.” 3. And most importantly, “the delegation was trying to find out what would be the measures Baghdad may adopt as retaliation for the referendum”. The source believes “there was no attempt to postpone or renounce the call for the referendum: Barzani has decided and is confident of his step”.

So the decision has been made and Barzani was aware of the consequences: personal representatives of the Kurdish leader visited various capitals (Beirut, Tehran, Ankara, Tel Aviv, Baghdad…) to understand what would be the reaction. Kurdish representatives I met were particularly concerned about the position of Hashd al-Sha’bi (the Popular Mobilisation Units – PMU) and their possible intervention. It seems the PMU are the main source of concern because of their reputation (track record) and because they include the battalions of Nineveh (who are involved in the referendum but who reject it).

The following step Baghdad is planning is to ask Erbil to present all its accounts in all official matters and expenses related to Oil Revenue (900,000 barrels per day pumped under KRG of which 600,000 b/d exported via Turkey) and also with reference to Communication Revenue (Erbil’s established Communication Company is under investigation and international arbitration for refusing to pay the Iraqi Ministry of Communication billions of dollars due for 3 years). Baghdad will certainly send forces to all disputed areas to protect these cities and prevent Kurdish forces (Peshmerga) from imposing their control over contested cities. In this state of insecurity for Erbil, the Peshmerga will be on continuous alert on all borders with the rest of Iraq, exhausting Erbil’s already strenuous and indebted finance.

Abadi won’t attack the city of Erbil but will limit the Kurds to a confined territory and will ask the international community to fulfil its commitment to reject the independence of Kurdistan, halting all economic cooperation.

Barzani masked the deterioration of his popularity and the critical financial situation of Kurdistan (due to the corruption of its leaders) and replaced it with a controversial referendum: he managed to brush away from Baghdad the oil and all other revenues already disposed of, and brought most of the Kurds under his umbrella by tickling their dream of an independent state, boosting again his popularity. But the price seems very high.

The Syrian Kurds of the Democratic Union Party (PYD) and its military branch, the People’s Protection Units (YPG and YPJ) will stand beside Erbil and will open their “borders” with Iraq: this in turn will violate the sovereignty of Damascus. But how this would help Erbil or “Rojava”, the “Kurdistan Syria”? Already the Syrian Kurds, in their situation, occupy an embattled position due to their accepting the position of US proxies. And they can’t open sea or air access to Erbil to boost Kurdistan’s economy, let alone compete with what the central government in Baghdad can offer.

The Syrian Kurds are waiting to see how the world will react to Iraqi Kurdistan to draw conclusions about their own next move. The US will have to think carefully what to do with Iraqi Kurdistan before taking any irrevocable step, since all decisions will have repercussions on its tenure in Syria and the occupation of north-east Bilad al-Sham.

Barzani’s only solution – if Turkey abides by its threat and the international community retreats from its previous position in favour of the central government in Baghdad – is to enjoy the referendum and its result: and do nothing at all. However if the Kurdish leader has received enough promises of protection from the international community and Turkey he, in this case, only needs to wait for few more weeks before making a final decision.

Kurdish Vote Won't Spark A Sustained Oil Price Rally

Authored by Nick Cunningham via OilPrice.com,

Turkey and Iraq have stepped up the pressure on Kurdistan after the semi-autonomous region of Iraq voted for independence. Turkey’s President Recep Tayyip Erdogan threatened to block Kurdish oil exports through Turkish territory, while Baghdad called for an international boycott of Kurdish oil sales.

The Kurdish people appeared to have voted overwhelmingly for independence on Monday, pending final results. But the Kurdish Regional Government has said that the vote, which won’t be recognized internationally, will be a starting point for negotiations with Baghdad, and not the culmination of real independence.

Turkey’s President called the referendum “illegal, null, and void,” and threatened to shut down exports through the pipeline that runs from Kurdistan to the Turkish Mediterranean port of Ceyhan.

“Let’s see where they are going to drain off the petrol — we control the valve,” he said. “Once you turn off the valve, it will be over.”

The referendum was also opposed by Iran, as well as the United States, which argued that it would destabilize the region.

Iraqi Prime Minister Haider al-Abadi said on Sunday that all foreign countries should not purchase oil from Kurdistan, arguing that the sales are illegal if not conducted under the auspices of the Iraqi central government.

Iraq “asks the neighboring countries and the countries of the world to deal exclusively with the federal government of Iraq in regards to entry posts and oil,” a statement from the Prime Minister’s office said.

Kurdistan produces just over 600,000 bpd, or about 15 percent of Iraq’s total output. Most contentiously are the oil fields around disputed areas in Kirkuk, which the Kurds took control of in 2014 when ISIS burst onto the scene and rapidly seized swathes of territory from the Iraqi government.

“The Iraqi government is not going to stand still and watch Kirkuk’s integration into Kurdistan, and the mobilization that we’re seeing is an Iraqi effort to reassert control over the contested territory,” Ayham Kamel, director of the Middle East and North Africa at Eurasia Group, said in a Bloomberg interview. Ethnic clashes “might become a pretext for much wider mobilization,” he added.

Kurdistan is largely at the mercy of its much more powerful neighbors. The bulk of the region’s finances come from oil exports, much of which go through a pipeline across Turkey to the Mediterranean. If Turkey takes draconian action to shut down Kurdish oil exports, it would cripple the Kurdish economy.

“If this boycott call proves successful, a good 500,000 fewer barrels of crude oil per day would reach the market,” Commerzbank said in a note.

The threat of the boycott, as well as the possible shuttering of oil flows through Turkey, led to a significant increase in crude prices, which touched two-year highs on Monday. Brent rose above $58 per barrel, the highest price in more than two years, although prices fell back slightly on Tuesday.

A more serious scenario would be some sort of military clash between Kurdistan and its neighbors. Turkey conducted military exercises along its border with Kurdistan, and Turkish President Erdogan ominously warned that “we may arrive one night, suddenly.”

Kurdish President Massoud Barzani called for calm and diplomatic negotiations, but on Tuesday the Iraqi government ruled out talks. “Barzani is playing a dangerous game of poker,” Anthony Skinner, a director with U.K.-based forecasting company Verisk Maplecroft, told Bloomberg by email. “He is counting on Turkey, Iran and the U.S. not being able to sustain a united stance on pressuring the KRG.”

The gamble is risky, but if the Kurds can stave off retaliation, there is an upside. Because any clash would be a lop-sided affair, given the lack of international support for formal Kurdish independence, military hostilities are unlikely. Turkey could shut down the pipeline that carries Kurdish oil, but Ankara also benefits from tariffs it receives for allowing those shipments to proceed. Baghdad has much less influence, so if Turkey declines to follow through on its threats, the independence vote could give the Kurdish government some leverage with Baghdad in negotiations over revenue sharing, a longstanding grievance that has not been addressed. The Iraqi government has tried for years to halt Kurdish oil exports, but to no avail.

The Kurdish government also recently resolved some outstanding issues with energy companies operating within its borders, restructuring debts and sending payments to some drillers. Rosneft just announced plans to invest $1 billion in Kurdistan to build a natural gas pipeline, a move that comes on the heels of hundreds of millions of dollars’ worth of loans to the Kurdish government earlier this year, to be paid back by future oil sales. The recent deals bolster Kurdistan’s energy outlook.

In short, the belligerent rhetoric surrounding the independence vote between Kurdistan and its neighbors could have already peaked. That might mean that the case for higher crude oil prices will need to come from elsewhere; oil bulls cannot base their bets on supply disruptions from Kurdistan.

Brent Crude Spikes To Highest Since July 2015

North Korean war-talk has extended early gains for Brent Crude (driven by anxiety over the post-Kurd-referendum fallout), pushing prices to their highest since July 2015.

To the highest since July 2015...

As Bloomberg reports, Kurdish oil supplies may be in jeopardy as Turkey, Iran and the Iraqi central government in Baghdad sought to isolate the semi-autonomous Kurds as balloting began on Monday. Meanwhile, OPEC and its partners implemented more than 100 percent of their agreed cuts last month, OPEC Secretary-General Mohammad Barkindo said Friday in Vienna, providing more fuel to the oil rally.

“It’s pretty clear the Kurds are going to vote for independence and we will have yet another geopolitical hot spot in the Middle East that threatens a significant amount of oil supply,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone.

At the same time, “the cooperation and the strong effort by OPEC is registering with the market.”

Brent crude oil futures curve has moved into backwardation in recent weeks, indicator of supply tightness...

And the Brent-WTI spread reaches its highest since August 2015...

"I Think There Will Be War" - Iraqi Kurds Fear Conflict After Referendum

Authored by Tom Westcott via Middle East Eye,

Official fears violence after 25 September independence vote, as disputes grow in areas controlled by Kurd forces outside original KRG borders.

Fears of fresh conflict in northern Iraq are bubbling to the surface weeks before Iraqi Kurds hold a contentious vote on independence, with warnings of war over disputed, ethnically mixed border regions and reports of Shia forces pushing Kurd officials from a town to prevent voting.

The Kurdistan Regional Government, or KRG, has refused repeated requests from Baghdad, the US and regional powers to postpone its 25 September referendum, saying it would only do so if an alternative was presented by Iraq’s central government.

Tensions have risen in areas liberated by KRG forces outside the region’s original 2003 borders, including the city of Kirkuk. On Monday the KRG’s president, Massoud Barzani, said “any attempt to change the reality using force” in Kirkuk “should expect that every single Kurd will be ready to fight.”

Dr Jutyar Mahmoud, a member of the region’s independence referendum commission, told Middle East Eye that disputed territories such as Kirkuk were the focus of fears of a new conflagration after the referendum.

“We will face border problems in the near future and I definitely think there will be another war, and soon,” he said.

He described Iraq as “militarily weak,” after three years of battling the Islamic State (IS), during which time forces have suffered extensive losses, particularly in the recent nine-month fight to liberate Mosul.

A greater threat, he said, was posed by Iraq’s other army – the Iranian-backed paramilitary Hashd al-Shaabi, or Popular Mobilisation force.

“The Hashd are another threat and maybe Iran will push them to fight us,” Mahmoud said, adding that Iraq’s prime minister, Haider al-Abadi, “doesn’t control the Hashd, but Iran can.”

Jutyar Mahmoud considered the Hashd a greater threat than Iraq’s regular army (AFP)

Hostile acts

His comments preceded bouts of recent unrest in some of the contested border regions. On Saturday, local Arabs pulled the KRG flag from a council building in Mandali, in the province of Diyala, and staged an armed, albeit peaceful, protest in the town.

The next day, the town council sacked the Kurdish mayor and overruled a previous vote that agreed to the town’s participation in the referendum, according to the Kurdish news service Rudaw. Claims that the Hashd were involved were denied by a well-placed source, who said such actions were not in line with the force’s policies.

The source told MEE that if local fighters affiliated with the Hashd were involved, they were representing themselves, not the Hashd al-Shaabi.

Also on Saturday, Kurdish Turkmen were urged to boycott the referendum by eight Turkmen parties in Kirkuk, who repeated Baghdad’s line that the vote is unconstitutional.

In Sinjar, 2,000 Yazidis have joined the Hashd, according to the force’s spokesman Ahmed al-Asadi.

Yazidi refugees living in camps said the move was prompted by dissatisfaction with the Kurdish peshmerga forces for failing to protect them from IS in 2014, and what they said was ongoing neglect and marginalisation of Yazidis under the KRG.

Adding to extant tensions are limitations of voter eligibility. Although northern Iraq has long been ethnically mixed, Arabs relocated under former Iraqi leader Saddam Hussein’s Arabisation schemes are not eligible to vote in the referendum, said the KRG referendum commission’s Mahmoud.

Voting in the disputed territories would also be limited to areas controlled by the peshmerga, Mahmoud said, adding that Hashd forces had made it clear that they would not accept ballot boxes being placed in any areas under their control.

Kirkuk’s tinderbox

Both the peshmerga and Hashd forces are maintaining a strong military presence in several disputed territories, including Kirkuk province.

Several thousand Turkmen Hashd fighters reportedly control what Hashd spokesman Asadi said was the lion’s share of the province, but he insisted any talk of war was political bluster.

“The Hashd al-Shaabi were founded to ensure the stability and security of Iraq, not to ignite sectarian or regional wars,” he told Middle East Eye.

“Anyone who promotes these ideas about war between Iraq and Kurdistan are outsiders intent on destabilising the security and stability of Iraq.

“The affairs in Kurdistan are not going to lead to a war and such talk is nothing but a passing political tempest to satisfy some political matters for some Kurdish politicians.

“We view Kurdistan as an Iraqi land and we will defend it as we continue to defend all of Iraq.”

Asadi said “brotherly ties” between Hashd fighters and the Kurds had been proved by how they stood united in one trench to defend Iraq in the battle against IS.

Baghdad, the US and regional powers have urged the KRG to postpone its referendum (Reuters)

Brotherly ties

Dr Kemal Kerkuki, a peshmerga commander stationed near IS-occupied Hawija, echoed this sentiment, saying the chance of war with Iraq was “very, very narrow, if not impossible” – but was keen to reiterate the strength of the peshmerga.

“The peshmerga forces are always ready to defend our lands and I think the fight against IS has shown the whole world what our forces are capable of,” he said.

“However, we are determined to use the referendum and all democratic tools in our negotiations with Baghdad for an amicable divorce.”

Kerkuki insisted defeating IS remained a priority for both the KRG and Baghdad, and said there was ongoing cooperation between Iraqi and peshmerga forces.

Having swiftly defeated IS in Tal Afar, Iraqi forces are now preparing to begin their operations to retake Hawija, in one of the many disputed areas along the border regions between the KRG and Iraq.

Kerkuki admitted there were recurrent problems between rival Iraqi forces but remained adamant that the referendum would help resolve rather than exacerbate problems in the border regions.

“The referendum is a peaceful and democratic tool to solve the chronic problems between the Kurdistan region and Iraq,” he said.

“The referendum is a tool to defuse war and intra-city conflicts in the newly liberated areas, particularly the so-called ‘disputed areas’.”

President Trump And Turkish President Erdogan Deliver Joint Statement: Live Feed

With relations between Turkey and the US suffering sharp recent deterioration, especially following tensions over the treatment of Kurdish militia in Syria, the strategy to eliminate ISIS, what role Syria"s president Assad  would have in the future of the middle east, and especially after Erdogan effectively declared himself quasi-dictator, many were looking forward with interest to today"s joint statement between the two presidents to see what if any compromise could emerge on the future of Syria, and specifically how fraying diplomatic ties between the two nations could be redeemed.

After Trump welcomed Erdogan to the White House he told reporters the two would have "long and hard discussions" that would make their bilateral relationship better.

"It"s a great honor to have President Erdogan from Turkey here," Trump said before the start of their meetings. "We"re going to have long and hard discussions. I know that they will be very successful. We"ve had a great relationship and we will make it even better. So we"re going to have a very, very strong and solid discussion."

OPEC's No.2 Goes Rogue: Plans 600,000 Bpd Oil Output Increase

Authored by Irina Slav via OilPrice.com,

Iraq has plans to boost its crude oil production by 600,000 bpd to 5 million bpd by the end of this year, regardless of its participation in OPEC’s production cut deal. Iraq is the cartel’s second-biggest exporter of crude and has been the most disinclined of all parties to the agreement since its inception, with a lot of observers expecting it to be the first one to cheat.

Iraq’s first problem is that as much as 95 percent of its budget revenues come from crude oil. There are no viable alternatives in sight for revenues at the moment. The second problem that the country has to contend with is its war with Islamic State, which makes these revenues more important than ever.

Amid the final push against IS in Mosul, Iraq is working hard to ensure the sustainable growth of its oil and gas industry—OPEC deal or no OPEC deal. Three months ago, Oil Minister Jabar al-Luaibi said that Baghdad is planning to build five new refineries on an investment basis, in addition to fixing and expanding existing refineries that were damaged in the war with IS.

While Al-Luaibi has repeatedly assured media - and indirectly, investors - that Iraq will stick to its OPEC commitment, Iraq is doing whatever it can to boost its returns from its only significant natural resource.

As part of these efforts, the government recently started a review of the contracts it has with foreign oil companies operating local fields in a bid to better match its interests to those of the operators. Currently, international oil companies in Iraq are working under the so-called technical service contracts, which a few years ago, forced them to reduce production from some of the country’s biggest fields because Baghdad had no money to pay them for operating the fields.

Baghdad is also cooperating with Tehran to make the most of the oil finds that the two neighbors share. Bilateral relations have been uneven historically but now that both Iraq and Iran are scrambling with their respective problems, a partnership has emerged as the mutually beneficial way to proceed. It is also strengthening its ties with other neighbors and farther countries such as Egypt, European Union members, and the U.S.

A 600,000-bpd production increase would be substantial, but Al-Luaibi did not disclose the source of this increase. Huge fields such as West Qurna, Rumaila, and Majnoon are nowhere near depletion, so Iraq could significantly boost production in these fields.

Then there is one more candidate for additional production: the Kirkuk field in the Kurdistan Autonomous Region. Kirkuk currently produces less than half a million barrels of crude daily, even though its can pump as much as 1 million bpd. The problem – yet another big one for Baghdad – is that the Kurdistan Regional Government is as eager as Baghdad to take full control of the field.

Tensions between the central government and the KRG have been simmering for a while now, and of course, it’s all about the oil, as both sides throw accusations at each other of overstepping its boundaries.

For now, Iraq’s plans to increase production seem to be vague, unless Al-Luaibi and the rest of the government just don’t want to go public with more specific plans. Given the price environment, however, and the growing likelihood that the production cut will be extended, Iraq’s output-boosting efforts have the potential of a major headwind for prices in the second half of the year.