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Kurdistan remains oasis of calm amid Iraq tumult

June 14, 2014 at 6:21 PM EDT
How does the fighting in Iraq impact oil exports to Europe and the United States? Matt Bradley of the Wall Street Journal joins Hari Sreenivasan via Skype from the northern Iraqi city of Erbil to discuss the fluctuations in global oil markets.

HARI SREENIVASAN: For more on the situation in Iraq, we’re joined now via Skype by Matt Bradley of The Wall Street Journal. He is in the northern Iraqi city of Erbil. So, uh, Matt, who is in-charge of that area right now?

Matt Bradley: The situation here in Erbil has not really changed, really, since the U.S. invasion in 2003. The Kurdistan Regional Government is in-charge here. And what’s interesting right now is that Kurdistan, uh, has been able to advance their soldiers to pick up the slack from where the Iraqi troops have left off. So, they’ve actually been able to take some territory. And some of the Kurdish officials that I spoke with yesterday said that they’re not planning on giving it back, no matter how secure the rest of Iraq becomes.

HARI SREENIVASAN: This is an oil rich area, right? I mean, world oil prices have fluctuated wildly and mostly in the upward direction in this past week.

Matt Bradley: That’s right. But Kurdistan remains in an oasis of calm interlock as it has for the last more than ten years. And so, they’re still pumping oil. But this particular conflict— these victories by ISIS— have basically allowed for the Kurdistan Regional Government to assert… to assert itself where the Iraqi military has… has fallen down, where they’ve failed.

HARI SREENIVASAN: Where does most of the oil from that region go? Does it go to Europe and does it have a direct consequence to the United States?

Matt Bradley: Well, of course, oil is a global commodity. So the price of oil shifts globally. So the price of oil is going to ummm, is… is somewhat separate from where the actual oil is coming from. But most of the oil in Iraq— which comes from some of the major reserves in the south— that goes to China.

China is about to become, umm, by far the largest buyer of Iraqi oil, as it—China has become the… one of the largest energy consumers in the world because of the growing economy.

S,o this is a, ummm, this is going to have a major effect, not just on China’s consumption of oil and not just America’s consumption of oil, but the price of oil globally because that’s simply how the market works in… in petroleum.

HARI SREENIVASANAny… any oil form the north? Does it go to a different area?

Matt Bradley: The oil from the north tends to go toward Europe and Turkey. But right now there’s a— a dispute between this Kurdistan Regional Government and Baghdad. They want to be able to— the Kurds want to be able to—sell their own oil independently without having to channel the profits and the actual oil itself through the Iraqi market in Baghdad.

Uh, they’ve been trying to smuggle oil out of Kurdistan, and bring it to the global market, to bring it to Europe and other place. Umm and that’s a dispute that was really reaching a— a very difficult moment. Right up until the moment when these attacks by Islamist militants really sent the Iraqi military running, and really emboldened the Kurds. And there’s been accusation from Baghdad, of course, that the Kurds were working with these Sunni militants in order to weaken Baghdad so that they could assert their own cause and their own economic rights.

Now, Kurdish officials strenuously deny those allegations. But, still, the Kurds are the big winners in all of this.

Hari Sreenivasan: So what’s the mood on the streets in Erbil? I mean, are they concerned about the war that may happen further south or the significant fighting that’s going on around them in other towns?

Matt Bradley: The feeling on the streets here is that this is just— this is the moment for Kurdistan. This is the moment for Kurdish nationals. So there is a strong feeling that ummm… there’s a strong feeling of… of Schadenfreude, if you will, the German word that means, you know, uh pleasure in someone else’s pain. The… the concept that… that Iraq is being torn asunder, that the Kurds were the ones who were trying to keep Iraq together, that they were the ones who, ummm, were coming to the negotiation table, they were the ones who were negotiating in good faith with the Baghdad government, and that Baghdad essentially by— with its own intransigence, with Maliki’s own sectarian policies— that Baghdad did itself in.

Hari Sreenivasan: All right, Matt Bradley from The Wall Street Journal, joining us from Erbil. Thanks so much.

Matt Bradley: Thank you.