An interesting view of the potential of Kurdish oil. But perhaps Dr. Koohzad doesn’t see the oil price determing battle between the Saudis and fracking America. Kurdish Oil is not controlling the international price of oil – yet.
Americans are very happy to see the price of fuel especially gasoline falling before the beginning of the cold season. They are smiling, happy, laughing, giggling, and even shouting at prices beyond their imagination. The price of gasoline has been deceasing since April and by now, for the first time in a long time, the price of regular gas is below $3.00 per gallon. However, Americans, being very polite people, are unaware of whom should they thank.
The explanation lies in the laws of supply and demand, which leads us to find out how much crude oil is produced where and controlled by whom. Apparently, the US itself has increased production. It is predicted that the US is on its way becoming the number one oil-producing nation in the world, a position that is held by the medieval monarchy of Saudi Arabia. In this country, oil production, distribution, and pricing are in the hands of few American oil cartels called Aramco. As a global strategic commodity, the price is also sensitive to political events.
After the US-led Invasion of Iraq in 2003, Kurdistan in Northern parts of the country became a de facto independent state but stayed in a Federal government system in Iraq. The Kurds fought side-by-side the Americans against their common enemy, Saddam Hussein. The Kurds provided the largest forces in the coalition. No Americans died as long as the Peshmerga, the Kurdish freedom fighters, accompanied them. The Kurds were the only group of people who actually came to various US cities to offer their appreciation for the help they received.
Greater Kurdistan has the second largest amount of proven oil reserves after the Persian Gulf Basin. The land and population of Kurdistan were divided into four unequal parts by the Western colonial powers by the end of WWI and are now controlled by Turkey, Iran, Iraq, and Syria. Of a total population of 40 million Kurds worldwide, 20 million of them live in Turkey, 10 million in Iran, 7 million in Iraq, 2 million in Syria, and 2 million in diaspora, mostly in Europe.
The Kurds have been able to achieve their basic human rights only in Iraq and Syria. The Iraqi Kurdistan is considered to be the bloodiest of all four parts. This was also the site of the first autonomous, and may be the place of the first independent and free, Kurdistan. It is seen as the heart of democracy in the Mideast, a region filled with brutal dictators and terrorism. In Turkey and Iran, the Kurds are seen as second-class citizens. It is important to note that all four parts of Greater Kurdistan have some amounts of proven oil reserves, with the largest being located in Kirkuk region of Northern Iraq.
Oil was discovered in the Iraqi Kurdistan near the city of Kirkuk in October, 1927. On that day, a massive fountain of oil gushed over the crown of the derrick to a height of 137.8 feet (42 meters). It took ten days from the first outburst to close the control valve and it shut off. By the time the well was capped, more than 95,000 barrels of oil a day had spilled into the ground. Thus, almost one million barrels of oil covered and polluted the region. It took 70 days to finally complete the clean up. It is believed that the natural gas discharge in the middle of Baba Gurgur oilfield was the source of a great fire, Eternal Fire that was around for thousands of years. The Eternal Fire may have been one of the reasons for the rise of Zoroastrianism in the region. The Fiery Furnace of the Book of Daniel perhaps was a reference to the natural gas reserves.
Regardless who was in power, monarchs, generals, or presidents, Baghdad was never fully able to develop the Kurdish oil in Kirkuk. It was constantly at war with the Kurds. This means most of the reserves are untapped and still available. It is believed that the Kurdistan Regional Government, KRG, alone has control over 45 billion barrels of proven oil reserves. Nearly 80 international energy companies including major ones such as ExxonMobil and Chevron are busy finding and producing more oil and natural gas under KRG’s jurisdiction. During the last decade more than 100 oil wells have been drilled here — three-times more than in the last century.
Baghdad, after 2003, agreed to pay the Kurds 17% of all of the country’s oil revenues, which is the percentage Kurds make up of the total population of Iraq. Then the Kurds needed more funds thus decided to deal with oil producing companies independently. Baghdad did not agree, and the Kurds went ahead with their proposals anyway. After repairing a pipeline of 600 miles (970 km) long from Kirkuk to the Turkish port city of Ceyhan, the Kurds believed they would be able to export up to 500,000 barrels of crude oil per day. This would be in addition to many truckloads of crude sent to Turkey and Iran daily. Actually, it is believed that, due to its location, the Kurdish natural gas will help Europeans to be less dependent on Russia.
Independent oil production by the GRG became a major bone of contention between Baghdad and Erbil (the capital of the Kurdistan region in Iraq). Baghdad stopped paying the Kurds any money. The KRG was almost bankrupted. Many of its employees were not paid for months. The Shia government of Iraqi PM al-Maliki was not in any mood to compromise, and, similar to former PM and now President Erdogan of Turkey, kept calling the Kurds “terrorists” every chance he got. Ankara and Baghdad have never had any sympathy or affinity for the Kurds. Actually, President Erdogan is busy recycling some the Cold War era’s issues such as labeling the Kurds “communists.” Since 2003 and even today, the Kurdish oil fields have provided energy starving Turkey with the largest amount of cheap oil.
Independently produced Kurdish crude oil from the pipeline found its way to the international market in May of 2014. It has been seen as contraband commodity, and only a few buyers were brave enough to buy it. Still a major proportion of the Kurdish crude was shipped to the eastern parts of Turkey, to the centers of population in and around the city of Istanbul. But outside of Turkey and Iran, Israel was the first country to pay for oil from Kurdistan. Since Baghdad has been following every single oil tanker, most buyers would like to stay anonymous. It is, however, obvious that a few American oil companies have been able to sell cheap Kurdish oil in the USA and bring down its price.
Although claimed by the Kurds, the Kirkuk oil fields were controlled by Baghdad until early June of this year. As soon as the world’s worst Jihadist terrorist, WWJT, captured Mosul, the second largest city in Iraq, on June 10, and the Iraqi Sunni armies ran away, the Kurds had no choice but to take over their own oil fields. Interestingly enough, WWJT also took over some of the oil producing areas and refineries in Syria and Iraq. This terrorist organization is making over $1 million in a day from selling oil, mainly to Turkey. In addition to taking over banks, tax collection, receiving cash from supporters, extortion, kidnapping and smuggling, oil sales have made these Sunni Jihadists the world’s richest terrorist organization.
Sales of Kurdish crude oil in large quantities will give the KRG more economic independence. Erbil was preparing for a referendum on going ahead with independence but now, similar to Washington and Baghdad, it is more concerned about protecting itself from WWJT’s attacks. Unfortunately, Washington is more worried about Iraq’s territorial integrity, a property that has never existed in the first place. Nevertheless, the world must know that the Kurds are not going to give up their right to self-determination when an ethnic group is allowed to decide its own statehood, its own allegiances, and its own government. Forcefully or peacefully, 40 million Kurds will not rest until achieve their total freedom. And the rest of the world can enjoy cheaper crude oil from an independent Kurdistan.
Dr. Koohzad is the author of a forthcoming book entitled: Kurdistan: World’s Largest International Colony.