Our Best Bet Against ISIL: Kurdish Crude

Following his admission that the United States lacked a strategy to deal with the Islamic State group, or ISIL, President Barack Obama launched a revitalized diplomatic campaign to rally America’s allies to our cause. Yet our strongest ally on the ground, the Kurdish Regional Government, or KRG, remains hamstrung by the Obama administration’s muddled and contradictory Iraq policy. We need the Kurds to stabilize and secure the region, but the Kurds need the U.S. to facilitate the flow of resources and weapons necessary to turn the tide of the Islamic State’s barbarism.

While the merits of the president’s plan were debated from the comfort of the U.N. General Assembly this week, the KRG is fighting on the front lines with its back against the wall. Despite the launch of the regional coalition’s aerial campaign in Syria and some gains, Islamic State fighters continue their advance in the region, encroaching on Syria’s northern region of Kobani, where Kurdish troops are struggling to protect the city.

Already, the region’s population has been deprived of water, electricity and humanitarian aid. Over 130,000 of Kobani’s residents have fled into neighboring Turkey, while another 400,000 remain, according to Fox News and the Wall Street Journal. Experts—including Syrian Democratic Party, or PYD, Co-Chair Salih Muslim and a report by the Kurdish Observatory in Kobani—have voiced fears that if the Kurdish military does not receive assistance soon, ISIL will unleash an even greater massacre on the region. The Islamic State’s murderous exploits in Iraq and Syria have already caused an influx of refugees that has doubled Kurdistan’s local population and depleted the nation’s public funds. As the KRG struggles to aid to those displaced by the conflict, Baghdad continues to withhold more than $12 billion in oil income from the Kurds, as well as equipment for the Kurdish military.

With a dwindling economy and lack of national revenue, the KRG’s fight against the Islamic State is unsustainable. Oil remains the one viable lifeline for the besieged Kurdish community. However, Iraq’s constitution states that the country’s oil is collectively owned, meaning that the Kurds cannot sidestep the central government to access international markets. Iraq’s leaders have skillfully exploited the myopic perspective of American officials, who are forced to promote the fiction of a cohesive Iraqi state and discourage international companies from buying oil directly from the Kurds. In courts from Texas to Rabat, the Iraqi government has launched a legal crusade to block any sale of Kurdish crude. As a result, tankers around the world are idling for weeks on end, full of Kurdish oil that they are unable to offload. 

Make no mistake, the legal battles over Kurdish oil and the military battles over Iraqi territory are part of the same war. Though the recent U.S.-led airstrikes have targeted ISIL-captured oil refineries in an attempt to deplete the organization’s resources, the Islamic State—having captured Mosul and gained control of a number of pipelines—continues to bring in hefty revenues, further enriching what is already the wealthiest terrorist group in the world, worth at least $2 billion, according to the Guardian and the Telegraph. The Islamic State makes the Taliban—who brings in an estimated revenue of $70 to 400 million per year, according to various sources—look impoverished.

The Obama administration must state loudly and clearly that the U.S. supports the sale of Kurdish oil directly bypassing Baghdad to meet the resource needs of the KRG and Peshmerga fighters. In fact, the administration should make direct purchases of KRG oil for the U.S. Strategic Petroleum Reserve.

More importantly, the U.S. must also immediately urge the sale of KRG’s oil on the European market. Europe is largely dependent on Russian oil. In the face of Russian aggression, such as Moscow’s recent incursion into Ukraine, Europe’s response will never be anything but feckless so long as their energy supply is held hostage to the whim of Russian President Vladimir Putin. In the long-term, establishing a viable supply of oil from the KRG into the EU would bring balance to the region’s wobbly energy security. The sale of KRG’s oil has the potential to ameliorate both the crisis of European energy security and the humanitarian and economic crises in Kurdistan.

Additionally, U.S. officials must explicitly urge their European counterparts to support the sale of KRG oil on the free market. Such a bold signal of U.S. support will be the vote of confidence necessary to reassure markets that Kurdish oil is a good bet, stimulating the windfall that is necessary to fund the long fight against the Islamic State in the many months to come.

(Related: Inside the US Push To Keep Kurdish Oil Under Baghdad's Watch)

The president made a pledge during his speech: “Our own safety, our own security, depends upon our willingness to do what it takes to defend this nation and uphold the values that we stand for.” We have the opportunity now to turn this pledge into a plan of action.

M. Ron Wahid is chairman and CEO of Arcanum Global, a global strategic intelligence company and subsidiary of RJI Capital.