Can Kurdistan benefit from Russia’s gas policy?

Russia deepened its energy diplomacy by exporting gas to China. The new energy supply venture to China is estimated to cost $400 billion as it requires building a pipeline. The deal will have significant economic and geopolitical impacts in the greater region and may open new doors in the energy sector for the Kurdistan Region of Iraq.

Let’s closely examine the deal and how it may impact the Kurdistan Region.

The drop of the global energy prices and the economic growth of China helped both countries reach a deal on Russia’s gas exportation to China. The project is a huge step for Russia to reduce its reliance on Europe and to “Pivot the East,” starting with China.

The impetus for Russia’s shift towards the East is the result of its strained relations with Europe after it annexed Crimea and for its overt support to the separatists in Ukraine.

Since natural resources, specifically oil and gas, are pro-conflict resources, the gas efficiency in China may cause internal movement for autonomy or independence in regions like: Tibet and Xinxiang. In this extreme case, China has the adequacy to use U-Shape Dynamic in order to regulate and balance between the internal sufficiency of Russia’s gas importation as well as its internal conflicts in Tibet and Xinxiang.

The $400 billion pipeline may causes unease throughout Europe; therefore, it likely will push Europe to secure an alternative gas source and make long-term energy plans.

On the other hand, Moscow is expected to export 38 billion cubic meters, compared to the 161.5 billion cubic meters that it exported to Europe. The return on the current gas deal with China is much smaller than the price tag on the pipeline; thus, it will likely be a long-term strategy.

Based on current statistics, China cannot replace Europe immediately. In the long term, China, along with the Asian market, could potentially be Russia’s alternative to Europe, as its strained relations with Western Europehas endangered its energy exports.

Both parties will mutually benefit from the gas deal in numerous ways. First, because China demands a secure energy supply and since, geopolitically, Russia is more stable and secure than the Middle Eastern countries, the former will honor the energy deal.

The second reason is the military relations between the two. Kremlin’s decision marks an important shift in China’s history. Previously, Russia’s arms export to China was limited; now—it is unlimited: China will have more access to Russian advanced military technology.

The third factor is China’s refusal to condemn the annexation of the Crimea. Russia’s seizure of the Crimea was not criticized by China; this notion is supported as China abstained from a U.N Security Council resolution vote in March 2014 for condemning Russia’s annexation of Crimea and intervention in Ukraine.

The last reason for Chinese interest in having closer ties with Russia is their common ideological beliefs: Both countries share mutual domestic and diplomatic political systems; they are both against the West and Western democracy. Within all these interests, the big question will rise: “How will the new pipeline affect Kurdistan’s oil policy?”

Geopolitically, Kurdistan should first declare independence to secure its position as a global player in the energy market, especially natural gas. Russia’s “Pivot to East” could potentially open new markets for Kurdistan’s natural gas exports, especially to Turkey and Europe.

Since three main actors control the global oil market, Kurdistan will be in competition in the short term as it is geographically situated in a conflict zone area, primarily because of the ongoing turmoil in Iraq and Syria. However, it should first prepare the grounds for independence and have a clear oil policy so the geopolitical upheavals will not affect it.

Linda Atta is student at the American University of Iraq-Sulaimani, majoring in International Studies and minoring in Economics.

Editing by Delovan Barwari