BMUN XII – ECOFIN

The Question of Potential Kurdish Oil Rights

Description

Kurdistan is crucial because of its vital location — straddling Iran, Syria, Turkey and Iraq. Ever since the Kurds were denied their own state after World War I, they have been focused on a search for self-determination. The Kurds’ key leverage is oil: Kurdistan has roughly one-third of Iraq’s total oil reserves, much of it is located under the sands near the city of Kirkuk, which was once a stronghold of the Islamic State in Iraq and Syria. Kurdistan’s neighbors — with their own restive Kurdish minorities — worry that oil will fuel the Kurdish push for independence from Iraq. Kurdish autonomy, they fear, would destroy the already precarious equilibrium in the region. Kurdish statehood is the last thing the Iranians, the Turks and the Iraqis want. Kurdistan become heralded as the new Dubai however, by late June 2014 the impact on Kurdistan was huge. ISIS fighters were within 30 miles of Irbil, the capital of Iraqi Kurdistan. Having fighters so close terrified the oil expatriates who had gone to Kurdistan and turned it into a petroleum boomtown. The parties ended. The construction stopped. Shopping malls and high-rise apartments were left half built as oil prices plummeted.

 

Recent uprisings

Kurdistan’s economy was hit by the financial and humanitarian costs of the war against ISIS and a collapse in business confidence. This led to an exodus of international oil companies and other key investors. The result was a severe financial crisis from which the region has yet to recover. Oil prices have bounced back, but it has become clear that Kurdistan’s oil reserves were overstated and that the region’s production is not sufficient to cover its operational costs.The 2017 referendum was catastrophic in terms of the Kurdish economy and oil production. Shortly after 92 percent of Kurds voted to leave Iraq, Baghdad and the regional countries responded harshly. The most brutal response was that the disputed oil producing city of Kirkuk fell to Iraqi forces. The city was taken out of the Kurds’s hands after they had fought a hard battle to liberate it from ISIS. It was a bitter humiliation, a political suicide for Kurdish leader Masoud Barzani, who resigned. But most of all, it denied the Kurds of the Kirkuk oil. The important countries in this issue are Iraq, Iran, USA, Syria  and Turkey

 

History

1970 –  the creation of the Kurdish Autonomous Region following the agreement of an Autonomy Accord between the government of Iraq and leaders of the Iraqi Kurdish community. A Legislative Assembly was established and Erbil became the capital of the new entity which lay in Northern Iraq

1973 – Second Kurdish Iraqi War Algiers Agreement which was a secret agreement between the US and Iran to begin covertly funding Kurdish rebels against Bagdad through the Central Intelligence Agency and in collaboration with Mossad, both of which would be active in the country through the launch of the Iraqi invasion and into the present

2011-2012 – Tensions between Iraqi Kurdistan and the central Iraqi government mounted through on the issues of power sharing, oil production and territorial control.

 April 2012-  the president of Iraq’s semi-autonomous northern Kurdish region demanded that officials agree to their demands or face the prospect of secession from Baghdad by September 2012

June 2014 –  ISIS had a major impact on Kurdistan

2017 –  Kurdistan Region independence referendum

October 2019 –  US troops pulled back from the border with Turkey after the country’s president said it was about to launch an operation to set up a 32km (20-mile) deep “safe zone” clear of YPG fighters and resettle up to 2 million Syrian refugees there.

 

Past solutions

  • When Iraq was defeated in the 1991 Gulf War, Barzani’s son Massoud and Jalal Talabani of the rival Patriotic Union of Kurdistan (PUK) led a Kurdish rebellion. Its violent suppression prompted the US and its allies to impose a no-fly zone in the north that allowed Kurds to enjoy self-rule. The KDP and PUK agreed to share power, but tensions rose and a four-year war erupted between them in 1994.
  • The Treaty of Lausanne, ratified in 1924, divided the Kurds among the new nations of the Middle East.
  • In January, the United States Institute of Peace issued a report that said that Kurdistan was on the brink of “economic collapse.” A rapid solution is needed, and will most likely have to come from the central government in Baghdad, to reassure investors that they are needed to rebuild Kurdistan after ISIS tore it to shreds. The only way for that to happen is for the two to renegotiate Kurdish oil policy and revenue sharing in terms of the Iraqi national budget.