Kurdish Vote for Secession Triggers Regional Volatility, Beginning With Oil

The Monday referendum confirmed the wide expectation that the Kurdish Regional Government (KRG) of Iraq would be moving towards secession from Iraq and independence.

The President of the KRG Masoud Barzani claimed the ‘yes’ vote on Monday’s as a personal victory. In a televised speech, he called on Baghdad and "neighboring countries” to respect the result of the referendum.

Turkey and Iran vehemently opposed the referendum. The country is home to 16 million Kurds and has fought a war with the secessionist Kurdistan Workers Party (PKK) for 33 years.

On Tuesday, the Turkish President Recep Tayyip Erdoğan called the Kurdish referendum "null and void.” Erdoğan made clear that Turkey will cut off the access of the KRG to the Turkish Mediterranean port of Ceylan, disrupting the supply of 500,000-600,000 barrels per day (bpd) of crude, and depriving the Barzani government of its main source of revenue.

Meanwhile, OPEC has also announced it is decelerating production while Iran may be facing some disruption of supply by US sanctions. Brent oil prices climbed to a 26-month high on Tuesday, September 26, 2017.

The security situation is unstable and potentially explosive.

On Tuesday, the Turkish and Iraqi militaries were holding common exercises along the border with the KRG, close to the town of Silopi. This is a region near the Syrian frontier, which is controlled by the Syrian Kurdish People’s Protection Units (YPG). Turkey considers YPG an extension of PKK. However, it is also a 50,000-strong force that has been armed by Washington as the main thrust of force in the campaign to take over Raqqa.

 "If Barzani and the Kurdish Regional Government do not go back on this mistake as soon as possible, they will go down in history with the shame of having dragged the region into an ethnic and sectarian war,” Erdoğan warned.

Analysts doubt that Turkey would risk a full confrontation with the PKK and the KRG. However, the threat of economic sanctions may be more credible, although it would come at a significant cost for the Turkish economy. Turkey is a major investor in the KRG and exports billions in goods and services to the region.

https://www.neweurope.eu/article/kurdish-vote-secession-triggers-regional-volatility-beginning-oil/
EVENTS Decarbonization Policies in South East Europe – between climate change and war Webinar IENE: Energy Security in SE Europe and the East Mediterranean 27th Annual National Energy and Development Conference IENE Workshop: Prospects for the Implementation of CCUS Technologies  in Greece and SE Europe

ADVISORY SERVICES Green Bonds

PUBLICATIONS The Greek Energy Sector 2023 South East Europe Energy Outlook 2021/2022 Long-Term Gas Contracting Terms, definitions, pricing - Therory and practice More

COOPERATING ORGANISATIONS IEA Energy Institute Energy Community Eurelectric Eurogas Energy Management Institute BBSPA AERS ROEC BPIE