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Oil losses could bankrupt the Iraqi Kurds

Tuesday, October 31, 2017

Significance

The border crossing is close to the vital oil pipeline tie-in at Fish-Khabur, where the Kurdistan Regional Government (KRG) oil export pipeline meets the federal pipeline (currently not operational) and continues through Turkey to the Ceyhan export terminal. Controlling this has been a key prize in recent fighting near Rabia, as well as in the US-mediated negotiations that followed a October 27 ceasefire.

Impacts

  • The KRG will urgently seek a revenue-sharing deal with Baghdad to avoid economic collapse, but it is in a very weak negotiating position.
  • If Baghdad takes control of the pipeline, covert ‘trucking’ of oil exports by various parties in the KRI will likely increase.
  • Federal Prime Minister Haider al-Abadi will gain strength ahead of April’s parliamentary elections.

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