Move Signals End to a Yearslong Political Impasse

ByMATT BRADLEY, SARAH KENT and GHASSAN ADNAN, WSJ, via Google News, Dec. 2, 2014

The growing threat of Islamic State was key to an oil-export deal struck by the Iraqi government and Kurdistan yesterday. The agreement signals an end to a long political impasse between Baghdad and the country’s northern region that has nearly bankrupted both sides and impeded their ability to fight off the extremists. We note that the move also advances Baghdad’s efforts to improve relations with the country’s Kurdish minority. The deal outlines the amount of oil that can be produced by each region and, we find, ensures that exports flow through Iraq’s national oil company—a win for the central government, which has long sought to exercise more control over Kurdish oil exports and revenue. In return, Kurdistan will keep nearly a fifth of Iraq’s budget expenditure. While good news for Iraqi unity and the fight against Islamic State, we note that the deal is likely to add to the downward tailspin in the oil market by augmenting the already ample supply.

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