Spotlight

Baghdad's oil dispute with the Kurdistan Regional Government (KRG) is putting stress on its relations with Turkey. Earlier this month, Iraqi government spokesman Ali al-Dabbagh accused Turkey of illegally importing oil from northern Iraq. "The oil and gas are the property of all Iraqis and those exports and revenues must be managed by the federal government which represents all Iraqis," Al-Dabbagh said.

Al-Dabbagh said Turkey's actions may harm the trade relations between two countries.

The agreement signed between Turkey and the autonomous Kurdish region earlier this month allows for the barter of oil and gas in exchange for refined petroleum products to meet the domestic demand of the Kurdish region.

Turkey and the KRG have also tinkered with the idea of a far larger oil and gas pipeline through Turkey, prompting concerns in Baghdad that the latest deal could be the tip of the iceberg in energy co-operation between Turkey and the Iraqi Kurds.

But the oil deals with the Kurdish region co-exist with energy ties between Baghdad and Ankara, mitigating tensions. The Kirkuk-Ceyhan oil pipeline, Iraq's largest, continues to carries Iraqi crude to the global markets through Turkey.

Meanwhile, Turkey has agreed to conduct technical investigations for a Basra-Kirkuk oil pipeline project and in May, a consortium led by Kuwait Energy in partnership with Turkey's TPAO and Dubai-based Dragon Oil secured a deal to explore Block 9 in southern Basra province.

Ercument Aksoy, chairman of the Turkish-Iraqi Business Council at the Foreign Economic Relations Board, told SES Türkiye that the rising tension between Baghdad and Ankara is a result of a conflict of interests within Iraq. He expects the situation to linger until the end of the year and can only be resolved with a settlement between the Kurdish region and Baghdad.

The government of Iraqi Prime Minister Nouri al-Maliki insists that the Kurdish region has no right to sign unilateral deals and exports must go through the state-run pipelines. The Kurdish administration led by Massoud Barzani, on the other hand, claims that the Iraqi constitution gives them the right to sign agreements without the approval of Baghdad.

Turkish businessmen are also siding with the Kurdish region on this matter. Mehmet Sepil, chairman of Genel Energy, a company that owns six production contracts in northern Iraq, told SES Türkiye that international oil companies are signing deals with the Kurdistan region and Baghdad has no right to dismiss these deals.

"Our company lawyers have looked into the issue and saw no flaws. These deals are completely legal," Sepil said.

This week, Iraq announced it blacklisted oil giant Chevron from oil deals with Baghdad after the company bought a stake in two fields in northern Iraq. Exxon Mobil was blacklisted for similar reasons.

Mensur Akgun, head of the Global Political Trends Centre, an Istanbul based think tank, told SES Türkiye that the al-Maliki administration is trying to increase its influence over the Kurdish region.

"Baghdad's warnings to Turkey about illegal oil imports are an implication of the power game that the Maliki government is playing. Turkey on the other hand is trying to enhance its ties with the Kurdish region to gain support for its struggle against militant groups of PKK," he said.

According to Akgun, Baghdad has a lot more to do to establish its internal authority. "Al-Maliki's government is representing a small fraction of the Iraq and the power struggle in the country may continue for some time."

Some Turkish authorities are concerned about falling on the wrong end of the power games being played between the Kurdish administration and the Iraqi central government.

Aksoy said there is a misguided perception of Turkey growing among the Arabs.

"They are concerned about Turkey's rapprochement policies towards the Kurds. They say Turkey may draw back its support from the Arabs. We should not let this perception grow."