US says oil contracts in Iraqi Kurdistan should be ‘respected’

Some companies have pulled out of the autonomous region following pressure from the federal government, which considers the Kurdistan Region’s oil exports unconstitutional.

The head of the US mission in Erbil met with a Kurdistan Regional Government (KRG) official today to discuss the ongoing oil dispute in Iraq.

Consul General Irvin Hicks Jr. held a meeting with KRG Electricity and Natural Resources Minister Kamal Muhammad Salih. The two discussed efficiency and sustainability in the autonomous region’s electricity sector, as well as efforts to reduce fuel emissions.

Following the sit-down, the consulate released a statement calling for the KRG and federal government to resolve their dispute over the former’s oil exports. They also called for oil contracts in the Kurdistan Region to be “respected,” according to a statement.

“We support the KRG’s dialogue with the Government of #Iraq on hydrocarbons and agree existing oil contracts must be respected,” the consulate said on Facebook.

Background: The Kurdistan Region exports oil and gas independently of the federal government in Baghdad, based on a 2007 law. In February, the federal supreme court ruled the law unconstitutional, which the KRG immediately rejected.

Why it matters: The ruling has led to a prolonged dispute between the KRG and the federal government in Baghdad. Last week, the federal government threatened legal action against companies buying oil from the Kurdistan Region. The KRG promptly condemned the threat.

The US consulate’s reference to “oil contracts” being “respected” could be a reference to some American oil companies ceasing operations in the Kurdistan Region under pressure from Baghdad earlier this year.

Know more: This is not the first time the United States has addressed the issue. Last week, a State Department official told the Kurdish news outlet Rudaw that the KRG and Baghdad should negotiate the matter in a way that “supports existing and future investments.”