US to fund Kurdish militia in bid to retake Mosul

18 Apr 2016, 4.19 pm GMT

Washington, 18 April (Argus) The US will provide up to $415mn to the Kurdistan Regional Government security forces in northern Iraq as part of the military campaign against the militant group Isis.

The direct funding for the Peshmerga militia would alleviate the financial pressure on the Iraqi Kurdish region, leaving it in a better position to continue making payments to foreign oil operators and meet its civil service payroll. The Kurdish region faces a $100mn/month deficit as a result of falling oil prices and a cutoff in funding from the Iraqi central government. The US State Department has estimated Peshmerga funding needs at $50mn/month.

US defense secretary Ash Carter announced funding for the Kurdish forces during his visit to Baghdad, where he met with Iraq's prime minister Haider al-Abadi and other officials to discuss the military campaign against Isis.

US president Barack Obama's proposed 2017 fiscal budget would allocate $7.5bn to the US Department of Defense to fund the military campaign against Isis and another $4.1bn to the State Department to support Iraq and communities in Syria in their fight against Isis.

The US also plans to commit more resources, including Apache helicopters and additional military advisers to help retake Mosul, the largest city under Isis' control. But the US expects the Iraqi security forces and the Kurdish militia to carry out the bulk of fighting to retake Mosul.

The US up to now has been reluctant to provide direct funding for Peshmerga, in part out of concern for the viability of the central government in Baghdad. Senior Kurdish officials visiting Washington last week pledged to keep Peshmerga forces out of Mosul after the city was liberated, in order to prevent the appearance of a sectarian conflict.

Pipeline exports from northern Iraq to the Turkish port of Ceyhan averaged over 534,100 b/d in the 19 days in March during which the pipeline was operational, and averaged some 327,400 b/d for the month as a whole. Iraq's total oil production, including areas under Kurdish control, was 4.07mn b/d in March.