Kurdistan Referendum: Time to Buy Crude Oil Futures?

On September 25, 2017, the people in Kurdistan voted in a referendum for independence. As a result, Turkey blocked 500,000 bpd of crude oil exports.

Gordon Kristopher - Author

Nov. 20 2020, Updated 4:15 p.m. ET


Iraq’s Kurdistan referendum  

Kurdistan is located in the northern part of Iraq. On September 25, 2017, the people in Kurdistan voted in a referendum for independence. As a result, Turkey blocked 500,000 bpd (barrels per day) of crude oil export pipelines. Kurdistan uses the pipelines that run through Turkey to export crude oil to the outside world. Turkey, Iraq, and Iran are against the Kurdish independence referendum.

The speculation of a supply outage supported crude oil prices on September 25, 2017. Higher Brent (BNO) and WTI crude oil (UCO) (SCO) prices have a positive impact on oil producers (IXC) (FXN) like Saudi Aramco, Stone Energy (SGY), and Denbury Resources (DNR).

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Escalating tensions

On October 3, 2017, Iraq banned selling dollars to banks in Kurdistan due to the referendum vote. On October 10, 2017, Iraq ordered the country’s state-owned oil pipeline companies to repair the oil pipeline between Kirkuk to Turkey’s Mediterranean Port of Ceyhan. The oil pipeline was damaged during militant attacks in 2014. Iraq is trying to rebuild the oil pipeline that bypasses the Kurdistan region so that it won’t depend on Kurdistan if there’s a conflict or independence. Crude oil (BNO) (USO) prices rose on October 11, 2017, due to rising tensions between Iraq and Kurdistan.

Iraq and Kurdistan’s crude oil production 

Kurdistan contributes to 10% of Iraq’s crude oil production. It pumped 544,000 bpd of crude oil in 2016. It has crude oil reserves of 45 billion barrels, which account for one-third of Iraq’s crude oil reserves.


Historically, geopolitical tensions have impacted crude oil prices due to the supply outage. It would support crude oil (BNO) (DBO) prices.

To learn more, read What Dennis Gartman Thinks about Crude Oil Prices and What to Expect from Crude Oil Prices in 4Q17.


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