Oil prices jumped last week with concerns over Iraq's military operations against Kurds in Kirkuk. Media reports focused on several aspects of the operations, including the crucial role of Kirkuk’s oil for both sides, the support of the Iran-backed Popular Mobilization Units in the Iraqi government assault and the deep concerns of the United States.

The uncertainty that emerged from this dispute also immediately caused an oil transport slowdown in the Kirkuk-Ceyhan pipeline, in turn opening a gap in the regional market that could easily benefit from the joint Iranian, Russian and Turkish deal announced in August for exploiting Iran‘s oil and gas resources. The question now is how this deal will hold up, given the constraints and threat of sanctions on Iran, and the ongoing case in New York of Reza Zarrab, a Turkish businessman accused of helping Iran evade sanctions.

Since Iraqi forces took over Kirkuk last week, the oil slowdown from Kirkuk is estimated to be as much as 210,000 barrels per day, according to Tanker Tracker’s satellite imagery. Oil flowing to Turkish ports is reported at less than half the normal level — about 240,000 barrels compared with a normal daily level of 600,000 barrels. Even though on Oct. 26, Iraqi Oil Minister Jabbar al-Luaibi called on BP "to quickly make plans to develop the Kirkuk oil fields,” he could not calm fears, because not only will technical repairs take time, but no one knows how long the dispute will continue before the oil trade volume returns to normal levels. For example, the same day of Luaibi’s call on BP, Russia's Rosneft announced an agreement with the Kurdistan Regional Government in Erbil to add as much as $400 million in oilfield investments.

This unfortunate dispute between Erbil and the central government in Baghdad has given new breath to oil market giants such as Russia, which have suffered under low prices since June 2014 related to OPEC measures. Those prices rose after Iraqi forces were able to take over Kirkuk.