Kurdistan Regional Government President Massoud Barzani arrived in the city of Kirkuk on Feb. 17 to show a united peshmerga front against the Islamic State. However, upon his arrival in Kirkuk, Barzani declared that only the Kurdish peshmerga will be allowed in the province, and that Kirkuk belongs to Kurdistan. His declaration was directed squarely at the Shiite militias that, after successfully beating back Islamic State positions in Diyala province, have been creeping north along the border with the Kurdistan region toward Islamic State positions in Kirkuk province. The Islamic State is positioned in the northern and western portion of Kirkuk province, while Shiite militias are encroaching into southern Kirkuk.
After Barzani ordered the peshmerga to prevent Shiite militiamen from the Iraqi Volunteer Forces from entering the province, Qais Khazali, the leader of one of Iraq's most active Shiite militias, Asaib Ahl al Haq, said that his men would enter Kirkuk if the province's residents requested it and that it was not Barzani's place to decide who enters since Kirkuk belongs to Iraq and not the Kurds. Meanwhile, the Kurdistan Regional Government has redeployed Oil Protection Forces from nearby blocks to reinforce security at the Kirkuk oil domes to prevent further encroachment by Shiite militias.
The Value of Kirkuk
The battle over Kirkuk was entirely expected. Barzani ordered Kurdish peshmerga to seize the Kirkuk oil fields and establish control over both the city and province after the Iraqi army fled during the Islamic State siege in July 2014. At that time, Stratfor cautioned that the Kurdish gains would not be permanent, because jihadists, Tehran and Baghdad would engage in an elaborate game of "keep away" to prevent the Kurdistan Regional Government from consolidating control over the Kirkuk prize.
Though the threat of Islamic State-induced cooperation between the Kurds and Baghdad, including an agreement on how to share control and revenue over northern exports, this relationship is barely working. The Kurdistan Regional Government maintains the right to unilaterally export oil from the north, while Baghdad retains the power of the purse to withhold budget allocations to the cash-strapped Kurds. A number of international oil companies awaiting payments — not to mention an overwhelming number of civil servants (including peshmerga forces battling the Islamic State) awaiting their salaries — have put significant pressure on Arbil as the dispute with Baghdad persists.
Baghdad is also feeling the crunch from $50-per-barrel oil as it wages an expensive war against the Islamic State. Moreover, it needs the cooperation of Kurdish forces to dislodge Islamic State fighters from urban strongholds like Mosul, with support from the United States. But Arbil and Baghdad are still in a largely asymmetric relationship. As long as Baghdad can maintain ambiguity over the legality of unilateral Kurdistan Regional Government oil sales, the Kurds will remain in a tenuous financial position and unable to capitalize on their own infrastructure and energy assets to divorce themselves from Baghdad.
Regardless of whether Baghdad needs peshmerga assistance, the Kurds have their own reasons for establishing a security buffer and extricating the Islamic State from the north. Moreover, the price of U.S. backing for the Kurds will entail peshmerga cooperation against the Islamic State threat and a commitment to work with Baghdad as Washington tries to preserve the authority of the central government and the territorial integrity of Iraq.
The Shiite-run government in Baghdad has several tools other than its financial clout to undermine the Kurdish position in Kirkuk. Shiite militias have been highly effective against the Islamic State and will be a necessary component of offensives. The Islamic State threat provides a useful pretext for Shiite militias to move into disputed territories like Kirkuk, where they can then try to reshape the demographics of the province by giving abandoned Kurdish property to cooperative Arabs as people start returning to areas where the Islamic State has been flushed out. Growing local Arab resistance to Kurdish rule, along with the ethnic and sectarian violence that ensues as Shiite militias target Sunni communities in these territories, will continue to challenge Arbil's authority in the Sunni-Kurdish borderland.
Baghdad can also exploit the personal ambitions of local officials, including the eminently pliable governor of Kirkuk, Najmaddin Karim. Karim understands that he presides over an oil-rich land, and he does not want to see those riches go exclusively to Arbil. Instead, he has quietly bargained for autonomy for Kirkuk — an idea that Baghdad and Tehran have entertained and even encouraged in their private talks with the governor. Karim also works closely with the Patriotic Union of Kurdistan, led by the Talabani clan, and has used the party's rivalry with Barzani's Kurdistan Democratic Party to his advantage in carving out a more independent role for Kirkuk. The Patriotic Union of Kurdistan has a strong presence in Kirkuk province and its members have openly questioned Barzani's move to take over out of concerns that Kurdish occupation of the province could invite more problems.
Karim and the Patriotic Union of Kurdistan may in fact be willing to defy Barzani's order to keep Shiite militias out of Kirkuk. Stratfor received information that in recent days, Karim held a closed-door meeting with Hadi al-Amiri, the leader of Iraq's oldest and most politically integrated Shiite militia, the Badr Organization. The details of the meeting have not been disclosed, but there are hints that both Karim and Hero Talabani, who is married to Patriotic Union of Kurdistan leader Jalal Talabani and wields considerable influence over the party, are both in negotiations to allow Shiite militias into Kirkuk. We can assume Barzani had a stern message for Karim and Talabani upon learning about this meeting, but his Kurdish rivals could still openly flout his order.
The battle over Kirkuk will intensify as Shiite militias inevitably encroach on the Kurdistan Regional Government's claimed sphere of influence. This competition could result in violent clashes between peshmerga and Shiite militias, an outcome that the Islamic State would welcome as it tries to hold its position in the north. The Islamic State remains a priority threat for both Baghdad and Arbil, but that threat alone will not be enough to allow for a sustainable compromise on energy exports, much less to neutralize the territorial competition over Kirkuk.