By Khalid Al Ansary , Anthony Dipaola , and Zaid Sabah
Iraqi soldiers moved late Sunday to take over oil fields in the northern city of Kirkuk from Kurdish forces, pushing crude prices higher amid reports of deadly clashes.
Prime Minister Haider al-Abadi ordered Iraqi forces to impose security in Kirkuk in cooperation with Kurdish Peshmerga forces, state television reported, adding that government troops had captured areas in the city without a fight. The local Rudaw news service said at least seven Iraqi militiamen were killed south of Kirkuk, citing an unidentified Peshmerga commander.
The Kurdistan Security Council confirmed in a Twitter message late Sunday that Iraqi forces and Shiite militias have advanced from southern Kirkuk, intending to take over a military base near the oil fields. Earlier, al-Abadi’s office had accused the Kurds of deploying militants from the Turkish PKK organization, saying that was considered a declaration of war against Iraq.
Kirkuk, home to Iraq’s oldest-producing oil fields, has emerged as a potential flashpoint between the country’s federal government in Baghdad and the semi-autonomous Kurdistan Regional Government, or KRG. Crude extended gains from the highest close in two weeks as speculation mounted over potential disruptions to output in the region.
Iraq is the second-largest OPEC producer, pumping most of its 4.47 million barrels a day from fields in the south and shipping it from the Persian Gulf port of Basra. But with Iraq supplying about 14 percent of total production from the Organization of Petroleum Exporting Countries, a conflict centered in the country’s north could have an immediate impact on oil markets.
Exports of about 600,000 barrels a day of crude from Kirkuk’s oil fields and from deposits inside the adjacent Kurdish region continued as usual on Sunday through a Kurd-controlled pipeline to Turkey, according to a person familiar with the matter, who asked not to be identified because the information is private. The shipments from Kirkuk combine crude pumped by Iraq’s state-owned North Oil Co. and by the KRG, and both flows are normal, Kirkuk Governor Najmaddin Kareem said Sunday.
Jaafar Altaie, managing director of Abu Dhabi-based consultant Manaar Group, predicted oil prices could jump by $2 to $3 a barrel if exports were halted by fighting between KRG and federal government forces, or by Turkey cutting off the pipeline from northern Iraq.
The latest dispute between Baghdad and the KRG over the Kirkuk area flared after their combined forces routed Islamic State militants from most of northern Iraq earlier this year. It intensified after the KRG held a referendum on independence from Iraq on Sept. 25. The KRG included Kirkuk in the referendum, prompting Baghdad to deploy troops closer to Kurdish positions in the area. Benchmark Brent crude ended the week 1.6 percent higher at $57.17 a barrel.
Iraq wants to boost its oil-production capacity after decades of sanctions, conflict, terrorism and, most recently, the occupation of territory in its north and west by Islamic State. Kurdish forces occupied much of Kirkuk province in June 2014 after Iraqi government troops retreated ahead of the advancing militants. Baghdad refuses to recognize Kurdish control of the area, where ethnic Arabs, Kurds and Turkmen all have overlapping territorial claims.
Baghdad is demanding that Kurdish forces hand over oil fields, an air base and other infrastructure in Kirkuk, Ahmed Al-Askari, head of the energy committee at the Kirkuk provincial council, said Sunday by phone.
Turkey, concerned that a declaration of independence by Iraq’s Kurds could spur the secessionist movement among its own Kurdish minority, threatened this month to cut off exports from the KRG-run pipeline via its own territory to the Mediterranean port of Ceyhan.