World Bulletin/News Desk
Analysts expressed concern Friday that the agreement on oil sales between Iraq's government and the Kurdish Regional Government may not last.
"Wait and see. It is a temporary agreement that does not address most issues. I am not rushing to conclusions," said Marina Ottaway, a Middle East expert at the Wilson Center, a Washington-based think tank.
"It is hard to imagine this is a lasting deal," comments Shwan Zulal, head of the London-based international affairs consultancy Carduchi Consulting.
The deal, announced late Thursday, requires the semiautonomous Kurdish region to provide about 150,000 barrels of its total oil production to the federal treasury.
In exchange, the Iraqi government agreed to provide $500 million to the cash-strapped Kurdish Regional Government, whose civil servants have not received pay in months. Iraqi Finance Minister Hoshyar Zebari said the payment represents a resumption of the budget allocation for October and would be followed by another for November.
For now, the Kurdish region will retain control of its oil exports, but negotiations are underway with Baghdad to settle the thorny issue of how revenue from sales of oil abroad should be distributed.
But experts have serious doubts about the deal's staying power.
Ottaway points out that the Kurdish region seems to be be able to sell oil internationally on a regular basis. "Thus the international market appears to have concluded that the Kurdish region can operate as an oil exporter without Baghdad's permission," she said. "This makes the Kurdish region feel more confident at a time it is desperate to increase its revenue because transfers from Baghdad have dried up."
For Zulal, it is a question of lack of trust. "Given that Baghdad decided to play politics with the budget, it is hard to imagine the Kurdish region giving up the right to export, and leaving the control of export revenue to Baghdad now," Zulal explained.
Crude keeps flowing through Turkey, Zulal said, despite the violence from the Islamic State of Iraq and the Levant. Nor has Baghdad's opposition to oil exports cut off the supply. All this strengthened Erbil's hand.
The fraught question of the control of oil export revenue, which Iraq’s federal government claims, while Erbil argues the oil sales were in compliance with the new Iraqi constitution, remains at the center of the dispute.
And the pot to be shared is large. The Kurdish regional government announced in October that its oil exports would increase from 250,000 to 450,000 barrels per day by the end of this year.
BIST 100 up 0.18 percent while USD/TRY exchange rate climbs over 3.8
Unemployment rate in October fell 1.5 percentage point year-on-year, says TurkStat
BIST 100 drops 0.31 percent to open at 114,286.27 points on Monday, US dollar decreases to 3.75 Turkish liras
U.S. Treasury Secretary says he wants to make sure bitcoin does not become a ‘digital Swiss bank account’
About 12 minutes into trading, the Dow Jones Industrial Average was at 25,675.70, up 0.4 percent.
BIST 100 rises 0.30 percent to open at 115,062.79 points on Friday, US dollar/lira, euro/lira exchange rates go down
Food Price Index gains 8.2 percent year-on-year in 2017, reaching highest annual average since 2014
Gas prices also rising in US, forecast to hit highest levels since 2014
BIST 100 rises 0.65 percent to open at 114,329.36 points on Thursday
‘We think the recovery is firm and the momentum is there says World Bank Development Prospects Group Director
Fiscal, monetary policies pushed economy 'to a much stronger-than-expected rebound in growth,' bank says
BIST 100 drops 0.18 percent to open at 114,812.31 points on Wednesday
Amazon founder’s fortune grew to $105.1 billion after company’s shares increase again
BIST 100 index up 0.01 pct; US dollar/Turkish lira exchange rate drops to 3.7470
BIST 100 gains 0.75 percent; US dollar-Turkish lira exchange rate hovers at around 3.74; euro-lira rate falls to 4.49
From clampdowns to a warm embrace, regulators in Asia have taken very different approaches to dealing with the bitcoin phenomenon. Here are the developments in a few key markets