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.

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.

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.

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.

Turkish-American Relations At Crossroads

Authored by M.K.Bhadrakumar via The Strategic Culture Foundation,

When President Donald Trump received President Recep Erdogan on Tuesday at the White House, his legendary deal-making prowess was be on trial.

Trump has not been in a tearing hurry to receive Erdogan. During the first 100 days of his presidency, Trump received the leaders of Israel, Egypt, Saudi Arabia, UAE, Jordan (twice), Iraq and Palestine. Yet, none of them belongs to a Nato member country and or is a crucial “swing” state in Trump’s messianic war against ISIS, as Turkey is.

Could it be Erdogan’s dalliance with ISIS in the past that put a dampened Trump’s enthusiasm for this “strongman”? But then, Saudi Arabia too was promoting al-Qaeda groups in Syria.

Or, was it Erdogan’s growing friendship with Russian President Vladimir Putin that discouraged Trump? But then, Trump greeted Egypt’s President Abdel Fattah el-Sisi in the White House as an old ally.

Clearly, the only good reason could be that Trump deliberately decided that there is a time for everything – even for meeting Erdogan. Trump thoughtfully let the Turkish referendum on constitutional reform run its course first. Trump now has the answer.

Erdogan extracted a “yes” vote in the referendum alright, and is set to concentrate executive power in his hands, but, paradoxically, he is a wounded man, having lost the referendum vote in all major cities, especially Istanbul, which has been his citadel. Erdogan barely scraped through.

On the other hand, an invigorated German-French axis following the resounding election victory of Emmanuel Macron means that a consolidated EU pressure is building on Erdogan to curb his authoritarian drift. Erdogan knows that a rupture of Turkey’s ties to the West would have grave economic and political consequences.

Meanwhile, if Erdogan had calculated that he could play off the US and Russia, that is also not to be. Trump simply outflanked him by opening a line to Putin regarding Syria before he met Erdogan.

Erdogan has been naïve. The Kremlin won’t risk annoying Trump. Détente with the US is an overriding concern for Russia.

All things taken into account, therefore, Trump did the right thing to meet Erdogan in the fullness of time. Trump’s decision to sign the executive order allowing the Pentagon to transfer heavy weapons to the Kurdish militia on the eve of Erdogan’s visit underscores it.

Trump is looking for a quick victory in Raqqa. The liberation of Raqqa will be prime time news in America. Who’d pay attention anymore to “a showboat” such as James Comey when the pictures are beamed from Raqqa into the living rooms of America?

The Pentagon commanders estimate that the Kurdish militia with US air support will liberate Raqqa successfully and swiftly. Indeed, latest reports suggest that the Kurdish militia has reached within two kilometers of Raqqa city limits.

Simply put, Erdogan who was hoping to dissuade Trump from aligning with the Kurds will now have to discuss concerns over post-liberation Raqqa. The ground beneath Erdogan’s feet has dramatically shifted.

He still can resort to strategic defiance by resorting to air strikes against the Kurdish militia, similar to the attacks staged by the Turkish air force on April 25 on the town of Sinjar (Iraqi Kurdistan) and on targets in the Karachok Mountains (northeastern Syria).

However, the US and Russian deployments to the Kurdish cantons in northern Syrian show that both Washington and Moscow have factored in such a possibility and have a tacit understanding that only their physical presence might act as a deterrent against Erdogan’s adventurism.

This opens up a tantalizing prospect – US and Russia having an unwritten division of labor to “tame” Erdogan. The Russian diplomacy has shown masterly skill in shepherding Turkish policies away from covert backing for extremist groups toward new directions that help to end the fighting in Syria. The Russia-US cooperation in Syria drastically curbs Erdogan’s elbow room.

What are Erdogan’s options? Trump has put him out of business since the US is no longer using Turkish proxies to push the “regime change” agenda in Syria. American retrenchment affects Saudi and Qatari policies, too.

Besides, Erdogan will be wary of provoking Trump. Apart from the discord over the extradition of Islamist preacher Fetullah Gulen, the US is keeping under detention the top executive of Halkbank Mehmet Hakan Attila whom it implicates in the sensational criminal case (which is also linked to Erdogan’s immediate family members) regarding abuse of the US financial system to conduct fraudulent transactions on behalf of Iranian entities.

Will Erdogan retaliate by shutting down Incirlik air base? Such a possibility exists, but remains unlikely. At any rate, Washington is focused on the liberation of Raqqa, and access to Incirlik is a secondary issue at the moment.

The bottom line is that Erdogan is running out of options and may be coming under pressure, finally, to (re)open his own channels to the Kurdish groups. Indeed, Turkey got along well with the leadership of Iraqi Kurdistan and a similar deal can be worked out with Syrian Kurds.

Being the consummate pragmatist that he is, Erdogan may well decide to pick up the threads of the peace process with the Kurds from where he summarily left them in 2015 due to compulsions over forthcoming electoral battles culminating in the March referendum to transform Turkey into a presidential system.

Significantly, Erdogan has reacted with extraordinary restraint to the Pentagon move to arm Kurds in Syria. He is mulling over his options. Trump can encourage him to seek a deal with Kurds. It may not be the mother of all deals, but a historic deal nonetheless, which will go a long way to stabilizing Syria and the wider Middle East.

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.