Stratfor is a Texas-based global intelligence company.
"Unnamed Turkish Energy Ministry officials have confirmed Wednesday (11 July) that Ankara is preparing to send a technical delegation to Iraq, supposedly at Baghdad's request, to discuss building an oil pipeline linking southern Iraq and Turkey.
This comes after Turkey has reportedly begun construction on a new oil pipeline connecting Kurdish energy fields to Turkish ports.
Even though Iraq's central government has responded negatively to the Kurdish Regional Government's (KRG's) increased reliance on Turkish support in its ongoing dispute with the government of Iraqi Prime Minister Nouri al-Maliki, Ankara's approach of offering concessions and projects to both Baghdad and Arbil seems to be gaining ground. Wednesday's announcement represents an important leap forward for Turkey’s ambitions in Iraq and, if successful, will make Turkey the premier enabler of foreign investment and development plans for both northern and southern Iraq.
Stratfor has long anticipated Turkey's regional rise, and Wednesday's decision is an important indicator that Ankara is ready to make strategic energy moves to deepen its influence in the region. Any external ambitions required Turkey to first address its internal Kurdish issue.
Ankara has therefore worked to develop a closer relationship with the KRG in hopes of reining in Kurdish separatist militancy. Turkey is making progress in reorienting the Kurdish region's economic and energy focus northward, keeping Arbil critically dependent on Ankara and linking their continued mutual success to the containment of Kurdish militancy.
But Turkey is not stopping at northern Iraq. It appears that Turkey is preparing to extend its influence to Baghdad and oil-rich southern Iraq, bringing Ankara in even closer competition with Iran.
The proposed Kirkuk-Basra pipeline would link the burgeoning crude oil production of Iraq’s southern oil fields with northern export pipelines. The extension would allow Baghdad to transport nearly 80% of current exports north through Turkey, bypassing the Strait of Hormuz.
The central government and its foreign investors have been dissatisfied with the performance of recently built terminals along Iraq's coast, and Baghdad will likely find Turkey's offer difficult to refuse. But Turkey has bigger plans in play than laying pipes south of Kirkuk.
Turkish energy consumption and power generation needs are expected to increase dramatically in coming years, and Iraq is in a particularly good position to meet those needs. By working to solidify its position as an East-West energy transportation hub, Turkey can use stable crude oil and gas deliveries from Iraq to incentivise positive negotiations with Europe by helping Europeans break their dependence on Gulf oil shipped through the Strait of Hormuz.
While still undeveloped and lacking necessary infrastructure, Iraq's proven natural reserves hold more than three trillion cubic metres, much of it in the Kurdish region. The volume of Kurdish natural reserves could replace Turkey's current imports from Russia for the next 50 years.
As Turkey begins to present a more meaningful challenge to Iranian influence, Tehran will have to expend more effort to maintain the gains it has made thus far before trying to extend itself further in the region. Iraq will become Iran's priority.
Keeping Tehran preoccupied closer to home could take some of the pressure off Turkey as it seeks to build stronger relationships with former Ottoman territories in the Levant. Key Arab stakeholders in the region, such as the Gulf Cooperation Council states, are indeed wary of Turkey's expanded influence, but these states are sure to appreciate any move that might curtail Iran's influence in Iraq and beyond.
Decreased energy dependence on Russia will also be crucial as Turkey seeks to reassert its former position in the Balkans and Eastern Europe.
Iran will likely balk at the idea of greater Turkish influence in Iraq, but Tehran lacks the capital and technology to counter Turkey's offers in a meaningful way. Beyond the technical specifics of hydrocarbon redistribution, Ankara is revealing itself to be a more capable partner for Baghdad’s long-term success than Tehran.
Turkey can provide the infrastructure and stable export routes that Iran cannot, a fact international oil companies will not overlook. Greater leverage in southern Iraq, the Shiite-dominated bastion of Iranian influence in Mesopotamia, would be a significant boon for Turkey's regional ambitions.
Iran will staunchly resist any Turkish encroachment, however, and Baghdad is unlikely to abandon Tehran overnight. While Turkey's economic levers are impressive, Iran has several tools at its disposal to challenge Turkish ambitions --namely Shiite militant proxies, intra-Kurdish rivalries and strong sectarian links to southern Iraq.
Unlike its very public and combative statements on Syria, Turkey's stealthy manoeuvring in Iraq via energy channels reveals the country's ongoing transformation into a significant regional power."