An independent Kurdistan, within the borders specified by the referendum, would own approximately 28.5 billion barrels of oil, putting it among the top oil producers in the world – just above Nigeria
The Kurds are a distinct ethnic group of people living in parts of Iraq, Turkey, Iran and Syria. Over the past thirty-five years they have been persecuted by Saddam Hussein and the Turkish government – who saw the Kurds as threats to Arab and Turkish nationalism – and have more recently fought against Islamic State and Assad’s Syria. The Kurds have long sought independence, but their more powerful neighbors, especially Turkey, fear that the establishment of a Kurdish state in northern Iraq will encourage their own Kurdish population (15-20%) to formally separate.
Since 2005, the Kurds in northern Iraq have governed themselves in a semi-autonomous fashion, run by the Kurdistan Regional Government (KRG). In a bold step, the KRG recently announced on that September 25, 2017 the government will hold a referendum on Kurdish independence, essentially taking for itself the opportunity to create its own declaration of independence. Right now, the KRG has autonomy in the northern areas of Iraq where the population of Iraqi Kurds is greatest, even though that area is technically part of Iraq.
The potential future Kurdish state, however, would include some areas claimed by the Iraqi government in Baghdad, in addition to the territory regularly considered under the control of the Kurdish government in Erbil. Some of the cities that would be in a new Kurdish state include Kirkuk, Khanqin, Sinjar and Makhmor – all of which are currently occupied by Kurdish Peshmerga forces in the ongoing fight against Islamic State.
This vote could redraw the map of the Middle East , which, despite decades of conflict, has basically remained unchanged since it was confirmed by the League of Nations in 1922. The U.N. will not be involved in this referendum in any way. It would bring a host of political and diplomatic issues, especially with neighboring Turkey and Syria. A Kurdish state could also significantly alter the shape of the global oil market.
The KRG is supposed to control only 6% of Iraq’s oil resources, according to its formal agreement with Baghdad. However, since the KRG currently holds Kirkuk and the surrounding oil fields, it has expanded to 20% of Iraq’s oil resources. According to OPEC data, Iraq’s oil reserves total 142.5 billion barrels. An independent Kurdistan, within the borders specified by the referendum, would own approximately 28.5 billion barrels of oil, putting it among the top oil producers in the world – just above Nigeria .
Petroleum resources of this magnitude could also help the Kurdish people in their pursuit of national self-determination. With experienced troops holding the line against Islamic State, impressive oil resources and a potentially vibrant democratic government, the Kurdish claim for independence could be difficult for the world to ignore, even if neighbors like Turkey, Iran and Syria object. OPEC could very well offer early recognition to an independent Kurdistan, because OPEC would not want to lose control over that amount of oil. Control by the Kurdish government would also be preferable to allowing paramilitary organizations like the Badr Organization or Islamic State to smuggle oil out of Iraq. This would enhance the Kurds’ claim for national self-determination. It would also be the least disruptive option for the global oil market.
On the other hand, an independent Kurdistan could become a rogue player in an already volatile oil market. The KRG has been creative in its exploitation of Iraqi oil resources, employing multiple different trading organizations to sell oil that Iraq believes it owns. It has furtively shipped that oil out of ports in Israel (which Arab countries will not do) and transferred it to tankers in Malta to avoid tracking by Iraq’s central government. If a young, capital hungry Kurdish state decides to produce more oil, use unconventional sales avenues, and sell at below-market prices, the global oil market could face further destabilization.
The Kurdish people have much difficult work before they have a viable, defensible and independent state. They will have to convince their neighbors—through arms or diplomacy—to accept them. They will need to transition from a people constantly fighting for their own defense and liberty to a people building a new state. They will need to consolidate their currently fragmented political system to create a sustainable governmental. They will need an economy, and oil will play a very large role in that.