Iraq’s Kurdistan Shipping Oil And Refined Products To Iran

Tanker trucks carrying oil and refined products from Kurdistan to Iran

Since the New York Times exposed the Kurdistan Regional Government’s (KRG) longtime shipment of oil products to Iran in July 2010, Kurdish authorities have repeatedly said that only refined products are going to Iran, that it is all legal, and that any crude oil from the region would only go through pipelines controlled by the central government. In August however, a reporter from National Public Radio (NPR) went to the Kurdistan border and interviewed truck drivers waiting to cross over to Iran who said that they were carrying not only oil derivatives like fuel and gas, but also oil.

Kelly McEvers from NPR went to a border crossing point between the KRG and Iran and interviewed some of the trucks drivers lined up there. One said that he was carrying refined products, while another stated that his tanker was full of crude. Most said that they were heading to Iranian ports along the Persian Gulf, and had no idea where their cargos were going afterward. All said they were working for private companies. A member of the Change List accused the ruling Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK) of being behind the trade. A spokesman for the KRG responded that the regional government sold surplus oil to private companies, and they could do what they wanted with it afterward. He acknowledged that some smuggling was going on with Iran, but that was a small operation and was not official KRG policy. The report contradicted earlier statements by Kurdistan officials. Before they denied that any oil was going to Iran. Other stories also noted that the truck drivers filled up at government run facilities and got their travel directions there as well, and KRG Natural Resource Minister admitted that the profits were going into government run accounts.

The slew of news articles about the Kurds’ activities this year have exposed their long standing smuggling to Iran. In the 1990s Kurdistan first began sending oil to Iran since they had friendly relations with Tehran, having fought on their side during the Iran-Iraq War in the 1980s, and to earn money independently from Baghdad that was controlled by their archenemy Saddam Hussein. After the 2003 invasion, the KRG began signing its own oil deals, started operating two oil fields, and claimed that it had the right to explore and export its own crude. The Oil Ministry objected to all of these moves and called them illegal. As a result of being shut out of the government run pipelines, the KRG decided to continue on with their smuggling operations to Iran, once again motivated by the fact that it provided revenue not controlled by Baghdad. They were able to do this rather quietly until the New York Times article this summer.

All the press since then has brought up questions about the KRG’s activities, but it will not stop them. First, some have questioned whether the trade with Iran violates United Nations and U.S. sanctions on Iran that were just passed this year. Second, it re-ignites the dispute between the central and regional governments over who has authority over oil sales. Third, it brings up the lack of transparency within Kurdistan and Iraq in general, which has no real accounting for its oil industry, and the profits it generates. Last, it has increased internal tensions within the KRG between the ruling parties and the opposition who have accused the latter of corruption and running the region as their own personal fiefdom. Despite all this controversy, none of it is going to stop the shipments to Iran because no one can deter the Kurds from doing so right now. Baghdad has no control over the border in Kurdistan, and the U.S. wants to support Iraq so it will turn a blind eye to the KRG’s activities.

SOURCES

Dagher, Sam, “Smugglers in Iraq Blunt Sanctions Against Tehran,” New York Times, 7/8/10

International Crisis Group, “Oil For Soil: Toward A Grand Bargain On Iraq And The Kurds,” 10/28/08

Majid, Kamal, “An Assessment of the conditions in the Kurdish part of Iraq,” Brussels Tribunal.org, 7/23/08

McEvers, Kelly, “Flow Of Oil From Iraq To Iran Raises Concerns,” NPR, 8/13/10

Muhammad, Sardar, “KRG presidential candidates,” Niqash, 7/9/09

El-Tablawy, Tarek and Barzanji, Yahya, “Oil smuggling to Iran embarrassment for Iraq,” Associated Press, 7/13/10

Iraq’s Northern Pipeline Attacked Again In Turkey

Iraq’s northern pipeline that travels through Turkey is becoming a favorite target of insurgents and oil smugglers on both sides of the Iraq-Turkey border. In the last four months it has been attacked and tapped six times.

The latest incident was on August 8, 2010 when members of the Kurdistan Workers’ Party (PKK) blew up a section in southeastern Turkey. The attack killed two civilian bystanders and halted the flow of oil for around four days. On July 3, the PKK bombed the line as well, which also resulted in it shutting down. 

In June and April, Iraqi insurgents and oil smugglers also targeted the pipeline. On April 22 there was an attack on the line in Ninewa that halted the flow of petroleum for 5-6 days and help up 200,000 barrels of oil. The incident cost $30 million in repairs and lost revenues. In June, a bomb hit the pipeline in Salahaddin causing it to shut down for another five days, smugglers tapped into it in Tamim, and on the 29th another bomb went off in Baghdad with just minor damage that time. 

These were the first attacks upon Iraqi and Turkish oil infrastructure in years. The April and June incidents marked the first times that the Pipeline Exclusion Zone, which protects most of the northern line, was penetrated since its completion in the fall of 2007. Until then the line was largely out of commission due to insurgent activity. Today it carries around 25% of Iraq’s oil exports. In July for example, an average of 374,000 barrels flowed through the line per day, compared to 1.436 million barrels per day in the south. On the Turkish side, negotiations between Ankara and the PKK halted fighting for over a year. Those talks recently broke down and PKK fighters have returned to the field. In both cases, insurgents are looking for targets of opportunity to undermine their governments. In Iraq, petroleum is the main source of revenue, and militants have obviously found a way to penetrate the Exclusion Zone or found areas unprotected by it. Carrying out operations in the rural areas where the pipeline travels through are also safer for insurgents since there are fewer soldiers and police around. Attacks upon the northern line are likely to continue until the Iraqi forces find out a way to counter them, and the insurgents move on to something else.

SOURCES

Agence France Presse, “Iraqi oil flow resumes after fire,” 8/12/10

Alsumaria, “Blast hits oil pipeline on Iraq borders,” 8/11/10

Hafidh, Hassan, “Iraq July Oil Exports -0.16% On Month At 1.820 Million B/D – Official,” Dow Jones 8/9/10

Reuters, “PKK bombs Iraq-Turkey pipeline,” 7/4/10

Special Inspector General for Iraq Reconstruction, “Quarterly and Semiannual Report to the United States Congress,” 7/30/10

Iraq's Military Requests U.S. Forces Stay Until 2020

Iraqi Chief of Staff Gen. Zebari

Iraq’s Army Chief of Staff told Agence France Presse that the United States military needed to stay in Iraq until 2020. General Babaker Zebari repeated an often made claim that Iraq’s security forces would not be ready until then to protect the country from external threats. He called on Iraq’s politicians to extend the U.S. presence after the 2011 deadline for their withdrawal set in the Status of Forces Agreement (SOFA).

Members of the Iraqi forces and Defense Ministry have been saying for years that the country would not have the planes, ships, and tanks necessary for external defense until 2020. Previous examples were a Ministry of Defense spokesman in August 2008 saying that Iraq would not have the medium and heavy weapons necessary for that task until that date. (1) The Minister of Defense Abdul Qadir Obeidi in the same month told the paper Azzaman that Iraq’s military would not be fully independent and re-armed until 2020. In September 2008, General Zebari told the press that the armed forces had plans to be equal to neighboring Iran, Turkey, and Syria within twelve years. The next year in April, the head of Iraq’s Air Force said that he wanted to buy 96 F-16 fighters from the U.S. by 2020 so that it would be on par with Iran and Syria. In February 2010 Minister Obeidi told Reuters the 2020 date again. 

Currently the Iraqi military is focused upon counterinsurgency. The Iraqi Army, the largest and most proficient branch, is deployed across the nation’s cities, manning checkpoints, and carrying out raids against militants. The Ministry of Defense has finally started moving towards external defense this year. The Iraqi Navy for example, is conducting patrols around Iraq’s offshore oil terminals, and one Iraqi division has T-72 and MIA1 Abrams tanks. The country still lacks all the equipment necessary to protect itself from other countries however, such as jet fighters, but is in the process of acquiring those weapons. Until then, Iraq will depend upon U.S. forces. The problem is at the end of 2011 all American troops are required to leave the country under the SOFA. It’s widely expected that the agreement will be re-negotiated, but it could be more difficult than the first time. For one, neither the American nor the Iraqi governments have prepared their legislatures or publics for such a long-term relationship. Second, Moqatda al-Sadr’s followers may have a prominent role in the next Iraqi ruling coalition because of their strong showing in the March parliamentary elections, and they are one of the strongest opponents of the U.S. presence. Those present early and daunting obstacles to any new Status of Forces Agreement, but it’s what both militaries want.

FOOTNOTES

1. Alsumaria, “Iraq upgrades security forces capacities,” 8/20/08

SOURCES

Adas, Basil, “US launches plan to boost Iraqi army’s capability,” Gulf News, 9/24/08

Agence France Presse, “Iraq ‘needs US military support until 2020,’” 8/11/10

Alsumaria, “Iraq to purchase F-16 fighters this year,” 4/1/09
- “Iraq upgrades security forces capacities,” 8/20/08

Arraf, Jane, “Iraqi Army: almost one-quarter lacks minimum qualifications,” Christian Science Monitor, 5/22/09

Jakes, Lara, “Iraqi forces lacking as U.S. military ends mission,” Associated Press, 8/4/10

Missing Links Blog, “Iraqi forces to be ready by the year 2020, according to plan,” 8/11/08

Reuters, “U.S. pullout top challenge for Iraq security: minister,” 2/28/10

Special Inspector General for Iraq Reconstruction, “Quarterly and Semiannual Report to the United States Congress,” 7/30/10

World Tribune, “Iraq’s makes wish list official: Two dozen F-16s,” 4/14/10

Ramadan Begins In Iraq

Wednesday August 11, 2010 marks the official beginning of Ramadan for Iraq's Sunnis. The country's Shiites will join in the next day. Despite warnings by the U.S. military that insurgents may step up attacks during this period, average Iraqis are going about their business, stocking up on food to be eaten after the day of fasting. Of more importance is the fact that this summer has seen extreme heat up to 120 degrees each day and electricity shortages continue, which will make it extremely difficult to not drink water during the day as part of their religious observances.

SOURCES

Agence France Presse, "Ramadan to start in Iraq on Wednesday: Sunnis," Khaleej Times, 8/11/10

Araff, Jane, "Iraq attacks likely to increase during Ramadan, says US," Christian Science Monitor, 8/9/10

Associated Press, "Iraqi Sunni Muslims embrace other," 8/10/10
- "Residents shop of fasting month of Ramadan," 8/9/10

Aswat al-Iraq, "Citizens rush for markets to avoid price hikes during Ramadan," 8/5/10

Inside Iraq, "First day of Ramadan," McClatchy Newspapers, 8/11/10

Background To Iraq’s Power Protests This Summer

Protest against power shortages in Basra, June 2010

At the beginning of the summer in June 2010 angry Iraqis took to the streets to protest the lack of electricity. Basra, which saw clashes leading to two deaths, Dhi Qar, Anbar, Wasit, and Diyala all saw demonstrations. The causes were the extremely high temperatures this year, and an increase in the gap between power supply and demand.

Electricity output in June 2010 was the highest monthly average ever due to high domestic production and record high imports, but that wasn’t enough. All together, the national grid put out 6,721 megawatts for that month. The problem was that at the same time there was a record high demand, an estimated 10,800 megawatts. The June supply only met 62% of the public’s needs as Iraqis faced temperatures between 110-120 degrees each day. In many parts of the country people only got four hours of power per day as a result.

Overall, output in the second quarter of 2010 was down from January to March, the first time that had happened since 2004. From April to June 2010 the government produced an average of 6,202 megawatts per day. There was a 4% decrease in output from power plants. Planned maintenance, shortages of fuel and water for generators, technical issues, mechanical failures, and the weather also resulted in the loss of 1,625 megawatts of capacity.

As a result of the protests, Prime Minister Nouri Al-Maliki was forced to sack his Electricity Minister and appoint Oil Minister Hussain Shahristani as a temporary replacement. Shahristani promised to increase output, cut special power privileges for politicians, and told the security forces to crackdown on people illegally tapping into the electricity network. As ever the root of the problem is the fact that Iraqis continue to buy consumer good such as refrigerators and air conditioners, the government hardly charges users for their power consumption, and the entire system is mismanaged. While there have been no more demonstrations since June, there are anecdotal stories in the press about popular discontent still being high, and the power system is no closer to being fixed then before.

SOURCES

Myers, Steven Lee, “A Benchmark of Progress, Electrical Grid Fails Iraqis,” New York Times, 8/1/10

Special Inspector General for Iraq Reconstruction, “Quarterly and Semiannual Report to the United States Congress,” 7/30/10

AL-BAYAN CARTOON: The Iraqi Government

Source: Al-Bayan, United Arab Emirates

Continued Problems Integrating The Sons of Iraq

The new Special Inspector General for Iraq Reconstruction (SIGIR) report to Congress notes continued problems integrating the Sons of Iraq (SOI). In 2009 the Americans transferred control of the SOI to Baghdad. The Iraqi government promised to give 20% of them jobs in the security forces, and the other 80% employment in other government positions. Since then there have been questions about Baghdad’s commitment to hire, pay, and support the SOI.

Iraqi officials claim around 41,000 of 94,000 SOI, approximately 45%, have been offered jobs. This is a change in rhetoric from previous SIGIR reports because in April 2010 it revealed that Baghdad counts any SOI that has been offered a government position to be transitioned whether they get the post or not. Therefore, no publicly available number exists for how many have actually found a position.

The hiring of SOI has also been on hold. All 94,000 were supposed to be integrated by the end of 2009, but the government said because of budget problems and the March 2010 parliamentary elections, that would have to be delayed. There has been little progress since the vote. The Finance and Interior Ministries are arguing over whether the SOI are included in a hiring freeze imposed in the 2010 budget law, and in May the Ministry of Defense said that it would halt all integration of SOI until the security situation improved. SOI leaders have also complained that the jobs that they have gotten are often menial.

In the meantime the government continues to have problems paying SOI. In 2009 Baghdad expended more than $270 million on the SOI program. Up to July 2010 they had only spent $75 million. March salaries were not paid until the end of May. By the end of June, only 85% of SOI in the country had received their money. 50% of the Sons of Iraq in Baghdad did not get their April and May paychecks. An unknown number of SOI have left their posts as a result to look for other employment, while those still at their posts feel increasing resentment.

Americans working with the Iraqi security forces have also noted little support for the SOI in the field. They’ve said that Army and police units do not provide security or logistics for SOI at checkpoints for example. The most brazen example was a June decision to disarm the SOI in Diyala. The government claimed that the SOI were civilians, and therefore had no right to carry weapons. The SOI have complained that they feel defenseless as a result.

All of these problems boil down to mistrust between the Shiite run government and the majority Sunni SOI, and a lack of government capacity. The authorities don’t trust the SOI, have rejected some because of their tribal affiliations, and continue to arrest SOI members. Many SOI are also young and uneducated, and therefore are not qualified for most jobs. Further problems are the lack of logistics, resources, and budget to integrate all of the SOI. Baghdad has not conveyed these problems to the SOI, nor their commitment to continued integration. The Sunni SOI in return, feel that the government is out to persecute them rather than support them. This is leading to increasing sectarian tensions. Al Qaeda in Iraq is attempting to take advantage of this division by continuing attacks upon the SOI to intimidate them, while also offering them more pay then the government to try to turn them back to the insurgency. A few SOI leaders claim that the lack of government assistance and pay is creating incentives for lower level SOI to turn towards Al Qaeda, and some actually have.

Despite the many pronouncements by U.S. and Iraqi officials, it never appeared likely that most of the SOI would ever be integrated. The Maliki government always considered the SOI an American creation, and never believed in it. As a result, Baghdad has always played with the numbers and pay. With U.S. troops withdrawing there is even less incentive for the authorities to follow through with their promises. In the end, some SOI will get government jobs, but the majority will be left to their own devices. With attacks down, the security forces stronger, and the Americans departing, Maliki appears to be willing to sacrifice the SOI. That will impact both the security situation in Iraq, and efforts to reconcile Sunnis and Shiites. Exactly how much is yet to be seen.

SOURCES

Harari, Michal, “Uncertain Future For The Sons Of Iraq,” Institute for the Study of War, 8/3/10

Hendawi, Hamza, “Al-Qaida in Iraq offers cash to lure former allies,” Associated Press, 8/6/10

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 7/30/10