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Turkey, At Energy Crossroads, Sliding Towards Authoritarianism

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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.

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Israeli Minister Stirs Pot With Call For Independent Kurdish Nation

Israeli Minister Stirs Pot With Call For Independent Kurdish Nation

In an unexpected geopolitical twist to a new phase of Turkish-Israeli relations, Israel has called for an independent Kurdish nation, which can only be based on crude oil discoveries and production bypassing Baghdad.

But it’s a bad time for anyone to make an independence bid on oil that’s sliding, and the question of which Kurds would be included risks major chaos.

Israeli Justice Minister Ayelet Shaked has called for an independent Kurdish state, renewing the debate on the consequences of the birth of a new Kurdish nation and the feasibility of independence funded by oil at rock-bottom prices.

Which Kurds, exactly, would make up this potential new nation is a subject that could dictate the future geopolitical chaos to come. Israel has for the most part made it clear that it is referring to the Iraqi Kurds and the Syrian Kurds, not the Turkish Kurds of the PKK (Workers Party of Kurdistan) variety. This speaks volumes about where Israeli-Turkish relations could be going, but it removes none of the complications. Related: Oil Prices in 2016 Will Be Determined By These 6 Factors

Having deteriorated over the past decade, Israeli-Turkey relations are now on the mend by geopolitical default. Turkey has alienated just about everyone else, including Iran, and the downing of a Russian war plane means it needs to make some new friends, and fast. But the rapprochement is a cat-and-mouse game, and Israel’s quiet call for an independent Kurdish nation is both a veiled threat and an olive branch, depending on Turkey’s next move.

Israel keeps dangling carrots and swinging sticks, and Turkey keeps taking the bait. Turkey has been hitting the air waves of late indicating that it needs Israel, and Israel has also been courting Turkey in new ways.

The friends Turkey has alienated have natural gas—so does Israel. The fact that reports are being ‘leaked’ out of Israel about the potential to see Israeli gas exported to Turkey are significant. Most likely this is an Israeli gimmick to push Turkey to a deal sooner rather than later, sensing Ankara’s growing desperation. The ‘leak’ has also been followed by convenient ‘surveys’ that claim to show that Turks view Russia as a greater enemy than Israel at this point.

But Israel is also accusing Turkey of buying oil from ISIS and helping it to fund its terrorist operations. Related: 60 Reasons Why Oil Investors Should Hang On

For Israel, which has made some amazing natural gas discoveries in the Levant Basin, Turkey is another good export market. It could also be a transport hub for Israeli gas. But Israel will be calling the shots here because Turkey is more desperate to wean itself off of Russian gas than Israel is to find a new market and transport route.

So where do the Kurds fit in? Geopolitically, there’s nowhere to fit all three nation groups without major consequences.

The Kurdish population in Turkey is estimated to be around 12-16 million, and through the PKK, the Kurds have been engaged in an uprising against the Turkish government since 1978. Without a brokered deal between the PKK and the Turkish government, some experts believe that the formation of a separate Kurdish state might lead to more unrest among the Kurds of Turkey, which might add to the unrest in the region. This is Turkey’s greatest fear, so the Israel dangling of a Kurdish nation is a veiled threat in general, but toned down with the inclusion of only Iraqi and Syrian Kurds.

It’s a tricky relationship for Turkey, which receives oil from the Iraqi Kurds and has a strong business footprint in Iraqi Kurdistan, which could not support a nation of Kurds from Syria, Iraq and Turkey. Related: Oil Up 3% But Bearish News Is On The Way

The Iran element also suggests that Israel may be insincere in its apparent call for an independent Kurdish nation. Iran wants greater influence in the Middle East, and an independent Kurdish state will likely help it along. Keep in mind, too, that with a stronger Iran, any consensus among the OPEC nations will remain a dream.

The outstanding question is whether the Kurdistan Regional Government (KRG) is strong enough to go it alone. The budget is taking a hit thanks both to its expenditures in fighting of the Islamic State and weak oil prices.

But producers still continue to impress investors with two resounding facts: The KRG controls around 45 billion barrels of known oil reserves and has a direct market to Turkey; and it’s one of the cheapest places on Earth to produce. Genel says it produces as low as $1 a barrel.

Can it fund nationhood? Investors seem to think so, but geopolitics may decide otherwise.

By Julianne Geiger for Oilprice.com

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  • Zubair Ellahi on January 29 2016 said:
    The nation which committed the biggest robbery of 21st century by stealing / forcefully occupying land of Palestinians and depriving them of statehood in their own remaining land is recommending state for another nation. Height of hypocrisy
    .
  • Dillawer K on January 29 2016 said:
    If Palestinians want others to feel for their misery they should be the first to feel misery and operations of similar groups, in this case a nation; the Kurds. Yaser Arafat's so called freedom fighters fought shoulder to shoulder with Saddam killing Kurds. Live and let live my friend.

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