Clash between the Kurdish autonomous government and Baghdad over control of Iraqi Kurdistan's oil resources

Iraqi Oil Minister Ehsan Abdul Jabbar Ismail has announced that the state oil company, SOMO, will now manage the extraction and processing of crude oil in Iraqi Kurdistan. The order is backed by Iraq's Federal Court, which ruled against the law regulating hydrocarbon exploitation in the autonomous region of Kurdistan. 

The courts have ordered the Kurdish regional government to hand over the management of these resources to the oil ministry. For now, the Kurdish authorities in Erbil, the Kurdish capital, have refused to obey this order, clashing directly with Baghdad.

The leader of the Kurdish autonomous region, Massoud Barzani, has declared that "the law on oil and gas in the region is unconstitutional and constitutes a violation of the constitution and the rights of the people of Kurdistan", as reported by Al-Arab. 

The decision confirms the rumours of many expert analysts in the region, as reported by the specialised media Al-Arab. The consequences could be serious for political stability in the country, which after an election failed to form a government around the winner of the elections, the Shiite cleric Al-Saadr, who won 73 of the 329 seats in October 2021. In addition to the Sunnis, the Kurdistan Democratic Party is one of the supporters of the Saadrist bloc. 

Al-Saadr thus finds himself at a difficult crossroads. On the one hand he hoped to meet the conditions imposed on him by Kurdistan Democratic Party leader Massoud Barzani, while on the other he must abide by the Iraqi court's ruling on SOMO's claim to Kurdistan's hydrocarbon resources. The support of the Kurds meant that Al-Saadr did not have to seek the support of Shiite groups close to Iran. According to Al-Arab sources, Al-Saadr is unable to stop the Oil Ministry and the state-owned company from establishing a foothold in Erdil.

Al-Arab analysts suggest that this gesture by the government and the Federal Court is aimed at humiliating Al-Saadr and his party. In the coming months, the Kurds are expected to put the election of a new president on the back burner and concentrate on negotiating with the government to avoid having their resources managed from Baghdad. 

These negotiations have already begun, and the Oil Ministry has made some statements on its social media accounts for the press. A Facebook statement reads: "The Federal Ministry of Oil and a high-ranking delegation representing the Kurdistan Regional Government will hold the first meeting today to discuss executive procedures, following the decision of the Federal Court to agree on new and standard mechanisms for the management of the oil industry issue in the region, in a manner that achieves the greatest benefit and financial return. This is intended to serve the public interest as it contributes to strengthening and supporting the national economy and promoting the integration of the national oil industry. 

Oil is one of the key natural resources for Iraq, and the country's revenues revolve around this economic activity. In 2018, oil activity was behind 75% of Iraq's gross domestic product and 90% of the government's revenue, through the state-owned SOMO. It is also the country's most exported product, with an annual volume of $59.73 billion, 95% of the country's total exports. In 2020 it was the world's fifth largest oil producer with 4,443,457 brent barrels per day, just ahead of China and behind Canada.