Iraq's central government for years has opposed the sale of Iraqi oil by the Kurdistan Regional Government (KRG) in northern Iraq. The KRG’s biggest oil sale was with Turkey in 2014, and at one time the dispute reached a crisis level with parties accusing each other of “misreading the [Iraqi] Constitution." However, as the oil argument was growing, the Islamic State (IS) invaded Mosul in northern Iraq. When IS began to threaten the nearby Kurdish region, oil squabbles were put on the back burner. Still, the KRG quietly continued its oil trade.

The KRG had serious problems coping simultaneously with the war with IS and its economic crisis. Now, with the IS threat diminishing, the oil trade is back on the agenda as the KRG energetically pursues more oil deals. The first major recent agreement was just made with geographically distant but politically near Russia.

The KRG’s presence at the St. Petersburg International Economic Forum, held June 1-3, was seen as routine. But news of an oil accord focused attention on the Kurds. KRG Prime Minister Nechirvan Barzani signed a 20-year-long oil deal with Russia’s Rosneft. According to the June 2 agreement, Russia will buy Kurdish oil and refine it in Germany. As a first step, Russia will invest $3 billion in KRG territory.

The deal continues and reinforces one signed in February on the purchase and sale of crude for 2017-19, according to Kurdish news website Rudaw. The deal gives Rosneft access to regional transport with a throughput capacity of 700,000 barrels per day (bpd), which will be expanded to as much as 1 million bpd by the end of this year, Rosneft said in a statement.