Oil seen as real prize of Iran’s Kurdish adventure

Oil seen as real prize of Iran’s Kurdish adventure

BAGHDAD/LONDON (Reuters) – After helping Iraq stifle a Kurdish push for independence, Iran is now positioning itself to take control of oil exports from the region’s giant Kirkuk field, with the first deliveries expected within days, officials and trading sources said.

In the weeks since September’s failed Kurdish independence referendum, Iraq has agreed for the first time to divert crude from Kirkuk province, which it retook from the Kurds, to Iran, where it will supply a refinery in the city of Kermanshah.

Iran is locked in a proxy war with its regional rival and U.S. ally, Saudi Arabia. As well as Iraq, it has been extending its influence in Syria, Yemen and Lebanon, raising increasing concerns in Washington and Riyadh.

Under the new arrangement, the first oil will be trucked across the border in the coming days. Initially Iran will receive 15,000 barrels per day worth nearly $1 million, rising gradually to 60,000 bpd, according to Iraqi officials and trading sources.

Baghdad and Tehran have also revived a project to build a pipeline to carry oil from Iraq’s Kirkuk fields to central Iran and onwards for export from the Gulf.

Hamid Hosseini, the Iranian secretary-general of the Iran-Iraq Chamber of Commerce, said Iran want to build a pipeline that can take as much as 650,000 bpd of Kurdish oil for its domestic refineries and for exports.

The pipeline would replace existing export routes for crude from northern Iraq via Turkey and the Mediterranean and would be a blow to Ankara’s hopes of becoming an energy hub for Europe.

It would also be evidence of a U.S. failure to prevent a rapprochement between its ally Iraq and one of its biggest political foes, Iran, which is rapidly regaining influence in the Middle East.

That is in part due to general Qassem Soleimani, commander of the Quds force, the international branch of the Revolutionary Guards, which is also taking a keen interest in Iran’s oil business in Iraq.

Soleimani visited Iraqi Kurdistan in September to warn the region against holding an independence vote. He was also involved in the Iraqi army’s recapture of Kirkuk.

“In Iraq, Iranian forces are working to sow discord as we recently saw in Kirkuk, where the presence of Quds force commander, Qassem Soleimani, exacerbated tensions among the Kurds and the government in Baghdad,” U.S. Senator John McCain said in Washington last week.