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A Squabble at Iraq's Oldest Oil Field Could Rock Global Supplies

  • Giant Kirkuk field producing at less than half its capacity
  • Local rivalries bubble up as Islamic State militants retreat

A territorial dispute in northern Iraq threatens to disrupt oil output at a field containing as much crude as Norway, even as U.S.-backed forces prepare what could be a decisive blow against Islamic State militants in the nearby city of Mosul. Kirkuk, where Iraq first discovered oil in 1927, can produce more than 1 million barrels a day but is pumping at less than half its capacity while competing ethnic and political groups scramble to control its 9 billion barrels of reserves.

Lying near a disputed city of the same name, the Kirkuk field is a tinderbox for potential conflict between the central government and Iraq’s semi-autonomous Kurds, both of whom have for decades claimed it as their own. More recently, it also became became a flashpoint for rival Kurdish political parties and their heavily armed supporters. “As Islamic State becomes less of a pressing threat, a lot of these tensions that had been subsumed into the common fight are inevitably going to come back to the surface,” says Richard Mallinson, an analyst at consultant Energy Aspects Ltd.