Ankara's announcement that oil controlled by Iraq's Kurdistan Regional Government will flow to international markets via Turkey this month could cause diplomatic complications worldwide. Dorian Jones has the story from Istanbul.
Since December oil has been flowing from the semi-autonomous Iraqi Kurdistan region to the Turkish oil terminal of Ceyhan.
Until now, the oil has been stored. But with the terminal depot nearly full, ministers from Ankara and the Kurdistan Regional Government say they expect this month to see the first sales of the oil.
Around 100,000 barrels a day of Iraqi Kurdish oil are being exported to Turkey, a figure that oil industry analyst says is expected to rise.
Diplomatic columnist Kadri Gursel of the Turkish newspaper Milliyet warns the sale could have far reaching consequences.
"It’s a step forward to boost KRG [Kurdistan Regional Government] independence, which puts in question the real integrity of post-Saddam Iraq these days," he said. "Oil is the only cement that keeps together today’s Iraq."
Regional analysts say the sale of the oil is seen as strengthening the hand of Iraqi Kurds. With these energy agreements, the Iraqi Kurds are betting that closer cooperation with Ankara will bring economic, and eventually political, independence a step closer. Turkey is also involved in many other development projects in the Kurdish province, from airport construction to hotels, roads, supermarkets.
Sinan Ulgen, a visiting scholar at the Carnegie Institute in Brussels, says Ankara benefits as well.
"It will be a very welcome success for Turkish foreign policy," he said. "It has a bearing on Turkey’s energy policy, its security of supply, and its independence from other country’s [supplies]."
However, Emre Iseri, a political scientist and energy expert at Izmir’s Yasar University, says such cooperation threatens to strain relations between Ankara and its strategic ally, Washington.
"The United States is also concerned about the Kurdish intention to bolster its independence," he said. "So Turkey also has [a] problem with the United States in that regard. They are blaming, in a way, Turkey, saying, 'you are in a way supporting KRG’s independence from Iraq'."
Washington has repeatedly criticized Ankara for any energy cooperation with the KRG that excludes Baghdad. The central government of Iraq insists that it has the sole authority under the Iraqi constitution to distribute and sell the country’s energy reserves.
The Maliki government warns that the Kurds’ right to 17 percent of oil revenues is subject to an obligation to sell oil through Iraq’s state-owned oil companies. However, the Kurds have turned ignored Baghdad’s warnings and sold a million barrels of oil to Turkey.
Semih Idiz, the diplomatic columnist for the Turkish newspaper Taraf, says such warnings are not taken seriously in Ankara.
"Ankara actually has a point when it says that, if America is concerned about this, it should first prevent the major American oil companies from doing business with the Iraqi Kurds," he said.
Regional experts say with the Iraqi Kurdish region being one of most secure and stable places in Iraq to do business, its oil revenues are likely to grow with the first expected sale of oil this month.