Going Middle East to Make a Fortune: To Kurdistan, the Next Dubai

U.S. policy is apparently to destabilize one of the few stable Middle East territories. By blocking sale of oil from Iraqi Kurdistan, in deference to corrupt Shia-dominated Iraqi government, U.S. policy throws a wrench into Kurdish economic development and future stability. On the other side, the U.S. State Department can claim that blocking Kurdish oil sales pressures Kurdish authorities to get together with Iraqi central government to work out their differences.

A 2010 headline reads “Is Kurdistan the next Dubai?” Two years later, a Gulf News headline reads “Is Erbil’s growth spurt hype or for real?” The article notes that average per-person income in Kurdistan is 50% higher than the rest of Iraq.

Kurdistan’s economy is surging partly from oil revenue, but also from pioneers and investment capital from Europe:

This place is growing faster than Dubai. In four or five years Kurdistan will achieve what the Emirates did in 20. You will not be able to recognise it,” says Cem Saffari. Looking down from the top floor of the 23-storey hotel where he works, overlooking a landscape dotted with construction cranes and new housing complexes, Saffari doesn’t hide his pride and satisfaction when asked why he moved from a comfortable life in London to a job in Kurdistan, in the north-eastern region of Iraq. “It’s a growing environment, which I like, and pioneers always win,” he says. (Gulf News, August, 2012)

Iraqi Business News reports economic growth at 12% in 2012 and 8% in 2013.
A March, 2014 Guardian article notes that many who left Iraqi Kurdistan for work in other countries are now returning.

At the Calvin Coolidge Presidential Foundation Summer Gala former Vermont Governor Jim Douglas spoke on political reform and it was mentioned that John Deere started in Rutland, Vermont before moving to Illinois. Now John Deere is an international leader in construction equipment and a June 19, 2014 Iraq Business News article notes:

Khudairi Group (KG) has stepped away from its projects to organize its inaugural Customer Appreciation Day at its Erbil dealership.Guests enjoyed a reception at John Deere, watched HSE-trained operators demonstrating the finesse of John Deere and SANY heavy machinery, including the 25-ton crane, the 315SK backhoes, and the 444K wheel loaders.

Ideally, U.S. policy would support continued economic development and stability in Iraqi Kurdistan. Except that isn’t U.S. policy, as indicated by this July 29, 2014 Miami Herald story: “US bars Kurdish oil from entering Texas port” 

 The U.S. has barred a shipment of Kurdish crude oil from reaching the Texas coast amid concerns independent oil sales from Kurdistan could further weaken Iraq’s fragile central government as it struggles to contain a Sunni military offensive. 

A U.S. District judge ordered a U.S. Marshal to seize the cargo — about 1 million barrels of crude oil, worth about $100 million — aboard the tanker United Kalavryta in response to a complaint filed by the Iraqi government claiming the oil was smuggled out of Kurdistan without its permission.

However, the tanker, anchored some 60 miles off the Galveston coast, is in international waters and thus outside U.S. jurisdiction. If it moves in closer so that smaller vessels can deliver its oil to shore, the U.S. Marshal will act on the court warrant and seize the cargo from those vessels, spokesman Dave Oney said. 

The United Kalavryta left a Turkish port in June carrying the crude from a newly opened pipeline that transports crude from the Kurdish oil fields. The buyer was not immediately known. (Miami Herald story)

So is the Iraqi government justified in trying to control oil exports from Iraqi Kurdistan? Are these oil exports somehow hurting the rest of Iraq? Or is the notoriously corrupt Iraqi government just trying to grab even more money from growing oil exports?

The U.S. Energy Information Agency says: “Iraq was the sixth largest net exporter of petroleum liquids in the world in 2012, with the majority of its oil exports going to the United States and to refineries in Asia.”