In Stratfor's 2017 Fourth-Quarter Forecast we wrote that although the Kurdistan Regional Government (KRG) would use the mandate for independence from its referendum to fortify its position in negotiations with Iraq's federal government, Kurdish independence would remain out of reach. Baghdad has been exerting its control over territory to fortify its own bargaining position, pushing Kurdish autonomy further out of reach.
The Kurdish struggle in Iraq shows no signs of slowing. In the last 48 hours, both the Kurdistan Regional Government (KRG) and the Iraqi federal government in Baghdad have accused the other of not negotiating in good faith. The Iraqi Joint Operations Command said Nov. 1 that the negotiations with the KRG had failed and were back to square one, and that Kurdish fighters were using negotiations to strengthen their defenses. The KRG responded, saying it had made a good faith proposal for a joint Kurdish-Iraqi deployment, with U.S.-led coalition involvement, to control the strategically important border town of Fishkhabor and the nearby Ibrahim Khalil border crossing. The two sides have reached an impasse over a thorny issue: sovereignty.
The strategic importance of Fishkhabor and the surrounding areas to this discussion cannot be understated. Fishkhabor is not in the disputed territories, but it has critical pumping and metering stations for all of Iraqi Kurdistan and northern Iraq's oil exports through Turkey's pipelines. But on Nov. 2, Iraq's State Organization for Marketing of Oil said it was in talks to sell Kurdish oil, cutting off Kurdish revenue. The Ibrahim Khalil border crossing is Iraq's only significant crossing into Turkey and Iraqi Kurdistan relies on Turkey for almost all of its non-oil trade. If Baghdad controls the region, it also controls the KRG's economy.
The KRG will likely lobby for Turkey to intercede, but that hasn't worked yet. On Nov. 1, Turkish President Recep Tayyip Erdogan said control over Ibrahim Khalil would be returned to Baghdad. Because of this, the KRG is proposing joint control — under the watch of international observers like the United States — so Baghdad cannot shut off or disrupt the region's economy during a dispute.
In the initial stages of the conflict, Iraqi security forces regained control of territory and infrastructure in Kirkuk, Diyala and Nineveh provinces. Baghdad had lost these areas to the Islamic State in 2014. Kurdish peshmerga forces later retook them from the militant group. Now, Baghdad has gone beyond its de facto 2003 border with the KRG and is moving to assert control over international border points such as airports. Iraqi forces, however, have not moved into areas under KRG control according to the 2005 constitution.
In the KRG's eyes, Baghdad is not only trying to reclaim territories it lost in 2014, but it's also trying to extend its control even further and limit KRG autonomy. In its most recent budget proposal this week, Baghdad referred to the KRG territories as "provinces of the Kurdistan Region" instead of the constitutionally approved term "Kurdistan Region - Iraq." Using the word province instead of region may seem inconsequential, but there's a clear legal distinction between the two: regions have certain autonomous rights.
It's now been more than three weeks since Iraq began advancing its forces against the KRG on Oct. 16. Both sides are standing by their respective positions for control or joint control of key areas. With Iraqi elections slated for May 18, 2018, Iraqi Prime Minister Haider al-Abadi will continue negotiating aggressively to shore up his image as a strong nationalist leader. Negotiations are ongoing, and KRG and Iraqi military delegations are reportedly meeting in Mosul under U.S. supervision, but this is the fourth U.S.-brokered meeting designed to push past the impasse. The dispute could last for months. In the meantime, Iraq will continue trying to expand its control and influence beyond its pre-2014 jurisdiction to improve its bargaining power with the Kurds.