The Kurdish Regional Government (KRG) appears to be making a serious effort to consolidate its control of the area, which is claimed by both Erbil and Baghdad, amid increasingly loud calls for Kurdish independence. Last week, Kurdish “peshmerga” forces seized control of two oilfields in Kirkuk.

There has been a plan for several weeks now to sell the oil from Kirkuk,” said a member of parliament, who confirmed that pumping had begun but asked not to be named due to the sensitivity of the issue. “They will try to sell oil as soon as possible, I believe, because Turkey is in agreement, even though legally, the oilfield belongs to Iraq.” He said the KRG parliament was preparing draft laws that it would use to claim its right to run disputed areas such as Kirkuk – and its oilfields.

Kurds have long claimed Kirkuk, which sits atop some of Iraq’s largest oilfields, as their historic capital. But it has been under central government control and is also home to large Arab and Turkmen populations, who have been wary of Kurdish moves to solidify control there.

The Kurds seized much of Kirkuk during a month-long blitz offensive by Sunni insurgents led by the Islamic State of Iraq and the Levant (Isis), who have seized swaths of territory in northern and western Iraq. Iraqi armed forces fled military sites across northern Iraq and handed many of them over to the peshmerga. Laura El-Katiri, a research fellow at the Oxford Institute for Energy Studies, said it was unlikely the central government would be able to retake Kirkuk.

“This would give more impetus to more Kurdish oil exports independent from the central Iraqi government in Iraq,” she said. “We are seeing a state falling apart.”

Relations between Prime Minister Nouri al-Maliki and the KRG have been worsening since January, when political disputes led Mr Maliki to cut the region’s budget and the KRG moved to sell its oil directly to international markets through a newly made pipeline that leads to Ceyhan, a port belonging to its main business partner, Turkey. “The central government owes us a lot of money and I think the KRG could very well claim that they will use any oil sales from Kirkuk as compensation,” the Kurdish MP said.

The KRG and the North Oil Company, which has long run Kirkuk oil production, appear to have made a deal with Baghdad’s knowledge to build a pipeline connecting to KRG infrastructure after insurgents in March sabotaged the Iraqi pipeline that ran through Kirkuk into Turkey.

The Iraq Oil Report says Kirkuk flow rates can reach as high as 120,000 barrels a day. Baghdad appears to be concerned Kurdish forces will continue seizing central government-held oil infrastructure, the Iraq Oil Report said, citing Iraqi units deployed to protect the Naft Khana oilfield near Kurdish-controlled parts of northeastern Diyala province.

The KRG is currently producing about 125,000 bpd and its aim is to reach over 400,000 bpd to compensate for their lost budget. That target could be reached if Kirkuk oil is sold.

But it is unclear how easily the KRG will be able to offload its oil – only one of four tankers loaded from Ceyhan has reportedly been purchased, though Kurdish officials insist all have been sold.

Baghdad had already vowed to sue anyone who buys Kurdish oil and last week said it had halted cargo flights to the region.

The Kurdish MP shrugged off concerns over retaliation, saying, “They’re not powerful enough right now to make problems with us . . . We are very confident.”

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