Over the past few month, as much as 77 percent of Israel’s oil has come from one source: Iraqi Kurdistan. The Financial Times reports that Israel may have spent as much as $1 billion on the region’s oil between May and early August, buying the energy through third party traders Vitol and Trafigura. Experts believe that Israel’s money may be contributing much-needed funds to the Kurdish government’s fight against ISIS.
Kurdistan is still part of the Iraqi state, and it is supposed to sell its oil through the Iraqi state-owned oil company. Last year, Baghdad successfully managed to block the sale of Kurdish oil to the U.S. by threatening a suit in a Texas court, yet Iraqi Kurdistan continues to push for control over its own oil deals, and has been selling not only to Israel but also to other countries, like Italy and Cyprus. Baghdad reportedly is aware of the sales, but is too occupied with other pressing issues to crack down. All it could manage at this time is a statement of protest.
In the background of this story lies Turkey. Kurdish oil is piped through Turkey and shipped out of Turkish ports. Ankara is trying to suppress Turkish-Kurdish and Syrian-Kurdish ambitions, but has nevertheless for some time now been underwriting Iraqi Kurdistan as a weak client semi-state (in part precisely by allowing them to transship oil to Turkish ports).
As TAI editor Adam Garfinkle recently noted, a large, unwieldy coalition is starting to coalesce in the Middle East. Anti-Iranian and generally anti-ISIS, the coalition is comprised of the Sunni Arab nations, Israel, and Turkey. It’s also riven with internal contradictions—the Egyptian and Turkish governments hate each other, for example, and the Saudis have gotten closer than ever to the Israelis even while all the Muslim nations officially maintain both antisemitic and anti-Israeli positions.
This news, therefore, seems of a piece: the Israelis and Kurds are both fortifying themselves for the struggles ahead against Iran and ISIS, respectively, and the countries are forging bonds in what increasingly seems to be a regional struggle. And yet, the pieces fit together awkwardly, due both to the anomalous status of Iraqi Kurdistan and the role Turkey is playing. It will take real skill to forge something durable out of these pieces—but as the oil deal shows, the opportunities are there.