Report: Turkey raises oil threat after Iraqi Kurds referendum

Turkey has threatened potentially crippling restrictions on oil trading with Iraqi Kurds after they backed independence from Baghdad in a referendum that has alarmed Ankara as it faces a separatist insurgency from its own Kurdish minority.

Most oil that flows through a pipeline from Iraq to Turkey comes from Kurdish sources and a cut-off would severely damage the Kurdish Regional Government (KRG), which relies on sales of crude for almost all its hard currency revenues.

Iraq’s Kurds endorsed secession by nine to one in a vote on Monday that has angered Turkey, the central government in Baghdad, and other regional and world powers who fear the referendum could lead to renewed conflict in the region.

Iraqi Prime Minister Haider al-Abadi’s office said on Thursday he had been told by Turkish Prime Minister Binali Yildirim in a call that Turkey would break with past practice and deal only with the Baghdad government over oil exports from Iraq.

So far the pipeline is operating normally despite Turkish threats to impose economic sanctions on the Kurdish autonomous region in Iraq. Turkish officials, however, have ramped up pressure on the Kurds.

Turkish President Tayyip Erdogan said after talks with Russian President Vladimir Putin the Kurdish government “made a big mistake by holding the referendum” and must be prevented from “bigger mistakes”.

He said Turkey and Russia agreed the territorial integrity of Iraq and Syria must be preserved.

Yildirim said separately that Turkey would respond harshly to any security threat on its border after the referendum, although that was not its first choice.

Yildirim also said he agreed with Abadi to coordinate economic and trade relations with the central government in Baghdad. He said Turkey, Iran, and Iraq may meet to discuss the referendum.

Turkish government spokesman Bekir Bozdag said Turkish armed forces would stop training Iraqi Kurdish Peshmerga forces, which protected oil fields from capture by Islamic State of Iraq and the Levant.

With the region’s largest Kurdish population, Turkey has been battling a three-decade insurgency in its largely Kurdish southeast and fears the referendum will inflame separatist tensions at home.

The United Nations offered on Thursday to help solve the problem between the KRG and Baghdad, the Iraqi foreign ministry said following a meeting between Foreign Minister Ibrahim al-Jafari and Jan Kubis, the top UN envoy in Iraq.

The United States was willing, if asked, to help facilitate talks to try to ease tensions between the two sides, US State Department spokeswoman Heather Nauert said.