Russia owns 60% of the Kurdistan Region's oil pipeline, but Ukraine had only some trades with the Kurdistan Region such as; cattle, Indomie, wheat, and coal, which has been terminated by the war. The region's government and leadership have not yet expressed their stance on the Russia-Ukraine war. But the Kurdistan regional government and leadership have not yet taken any action.

The region between Russia and Ukraine

It has been a few days since Russia's attack on Ukraine has begun, most countries in the region and around the world have expressed their stance on the war, but the Kurdistan regional government has not yet taken any action.

To understand the Kurdistan Region's relationship with both sides of the war, we have to take a look at the region's economic relations with Russia and Ukraine.

The economic relations of the KRG with Ukraine

According to the Sulaymaniyah Chamber of Commerce and Industry, the region’s trade with Ukraine has completely terminated since Ukraine has imposed a state of emergency for 30 days.

Ukraine has a lot of trade relations with the Kurdistan Region and Iraq, and because of the war, all business has now been suspended.

“Ukraine had significant trade relations and cooperation with Kurdistan Region, but escalating Ukraine-Russia crisis will greatly harm our business.” Said: Peshawa Sirwan, a businessman in Sulaymaniyah. 

According to Sirwan, Ukraine’s products exported to the region were:

• Food

• Juice

• Milk

• Indomie

• Cleanser

• Coal

• Sunflower oil

• Wheat

• Cattle

The war situation has led traders to find alternatives to Ukrainian products, particularly in neighboring countries such as Iran and Turkey so that they continue their business.

According to the director of Sulaymaniyah International Airport, in 2017, (86,144) cattle have been imported to Sulaymaniyah, and most of them were imported from Ukraine.

Some traders from the Kurdistan region have been importing Ukrainian wheat and mixing it with the wheat of the region's farmers and handing it over to Baghdad. This was a reason for the Iraqi government to delay farmers’ payments.

Economic relations between Russia and the KRG

Russia was one of the countries that did not support the fall of the Baathist regime in Iraq, but soon after the fall of the regime, Russia began building a new relationship and opened its consulate in Erbil in 2007.

Russia now has economic interests in the Kurdistan Region, the 60% share of the Kurdistan Region's oil pipeline is owned by the Rosneft Company. The Kurdistan regional government sold pipelines in return for receiving loans from this Russian company.

According to data, the owner of The Rosneft Company, who has close ties to the Russian president Vladimir Putin, earned $272 million in revenue from the region's oil pipeline in just six months of 2021.

The contract for selling the Kurdistan Region's oil pipeline to Rosneft company was signed on June 2, 2017, in Saint Petersburg, Russia. 60% of the Kurdistan Region's pipeline share was sold to the Russian company for one billion and 700 million dollars. 

In addition, the Russian Gazprom company operates in two oil fields in Garmian, Sulaymaniyah, which was launched in 2012.

This was the beginning of the Kurdistan Region's economic relationship with Russia after Saddam's fall.

Russia maintained its neutrality between Baghdad and the region during the 2017 Kurdistan Regional Government's independence referendum and has not clearly expressed its stance.

Russia is now one of the countries that, similar to the Europeans, is looking at natural gas in the Kurdistan Region.