Brent crude spiked today after Turkey threatened to cut off the 700,000 barrels a day of oil that Iraqi Kurdistan ships to the Mediterranean via a Turkish pipeline. Turkish Prime Minister Erdogan, who fears that the Kurds’ (non-binding) independence referendum will inspire separatist sentiments among Turkey’s large and expanding Kurdish population, can shut off the valve as a last resort.
He’s unlikely to do so, because the internal political consequences of an attempt to starve out Iraqi Kurdistan would be devastating for Turkey, and unmanageable for Iraq as well.
As Asia Times columnist “Spengler” reports on the main page today, the whole world opposed the Kurdish vote because it threatens the stability of Syria, Iran, Turkey and Iraq, the four countries with large Kurdish populations. Precisely because the regional powers (and the US, Russia and China) fear instability, they will respond to the Kurdish vote by pretending it didn’t happen. Brent seems rich.