Iraq and the Kurds: The High-Stakes Hydrocarbons Gambit

Middle East Report (International Crisis Group) N°120, 37 p. 

Baghdad/Erbil/Washington/Brussels, 19 April 2012

A simmering conflict over territories and resources in northern Iraq is slowly coming to a boil. In early April 2012, the Kurdistan regional government (KRG) suspended its supply of oil for export through the national Iraqi pipeline, claiming Baghdad had not fully repaid operating costs to producing companies. The federal government responded by threatening to deduct what the oil would have generated in sales from the KRG’s annual budget allocation. This latest flare-up in Erbil-Baghdad relations has highlighted the fact that not only have the two sides failed to resolve their differences but also that they have deepened them to the point that a solution appears more remote than ever.

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