Can Turkey Leverage Kurdish Crude?
Given the geopolitical trends and commercial interests in the region, Ankara may be leveraging crude from the Kurdistan region of Iraq as a means of getting the best energy bargain with Baghdad.
The proposed energy framework between Turkey and the Kurdistan Regional Government (KRG) has raised hopes for independent Kurdish oil exports and a viable way to pay international oil companies (IOCs) in the Kurdistan Region. Some think the framework could eventually give the Kurds an alternative revenue source that replaces Ankara for Baghdad as the region’s financier. Yet, while encouraging Kurdish energy development, Turkey still has made no clear commitment to an independent pipeline that would circumvent Iraqi state sovereignty. This is because Ankara’s endgame is not only securing Kurdish crude, but maximizing Turkish commercial interests in Iraq. Doing so will likely entail negotiations with Baghdad that include Erbil, but which prioritize Iraq’s territorial integrity, secure Ankara’s interests and seek concessions from the Kurds.
Turkey’s quest for Kurdish crude is not surprising, given its geographical proximity to the region, domestic energy needs and growing influence over the KRG. Ankara is not only well-positioned to continue "bartering" operations with Erbil — exchanging trucked, Kurdish hydrocarbons for diesel products — but to further entrench its energy interests by establishing a state-affiliated company that would invest in Kurdish oil fields. This tactical move would allow Ankara to circumvent Baghdad’s blacklist of companies without jeopardizing its state-led (TPAO) hydrocarbons investments in southern Iraq.
