Events in Iraq over the last week or so have cast yet another shadow over US foreign policy in the Middle East, raising doubts about whether President Trump can follow through effectively on his promises to curb Iranian influence in the region. The Iraqi Army’s October 16 takeover of the disputed, oil-rich city of Kirkuk—supplemented by Iran-backed Shiite militias known collectively as the Popular Mobilization Forces (PMF)—has prompted a significant shakeup within the semi-autonomous Kurdistan Regional Government (KRG) of northern Iraq. Now Iran’s Kurdish proxies are poised to exert more influence over local politics than at any point in the past 20 years.

Those proxies, in particular the Patriotic Union of Kurdistan (PUK), have been marginalized within the KRG since 1997, following the conclusion of the Iraqi-Kurdish civil war between the PUK and its rival, the Kurdistan Democratic Party (KDP), which ended in victory for the latter. Since the end of that war, the KDP has dominated KRG’s parliament, maintained control over the office of the presidency, and cultivated close working relationships with the United States, Turkey, and, some say, Israel.

The events surrounding the fall of Kirkuk have shaken up this balance in a way that will likely strengthen both the PUK and Iran, which as a result will enjoy increased leverage over KRG politics, likely at the expense of both the KDP and the United States. Military and political pressure that Iran’s proxies have exerted on the KDP since October 16 has already produced tangible results: Late on October 24, the KDP-led KRG government announced that it had decided to “freeze” the results of the controversial September 25 KRG independence referendum and engage in “open dialogue” with the Iraqi government in Baghdad. This comes just days after the top figures within the PUK leadership publicly denounced the referendum, warming up to the international and regional position regarding its legality.

Although these developments may be welcomed in Washington—which also opposes the referendum—this can hardly be considered a victory for the United States. American diplomats, including Secretary of State Rex Tillerson, have made their opposition to KRG secession clear to Kurdish politicians for years, to little effect. Rather, it was Iran-backed hard power and diplomacy that produced a change in the KDP’s position, not the United States.

Relations between the KDP and Washington may also sour, in part because of Washington’s failure to provide military, diplomatic, or political support to Kurdish forces in Kirkuk, but also because of the Trump administration’s opposition to the independence referendum.

“When I served in Iraq, our goal was to constantly balance our responsibilities and commitments to both Baghdad and the KRG without appearing as if we favored one or the other,” Robert Ford, former diplomat and US ambassador to Iraq following the Iraq War, told The Nation. “I think now, that’s going to be a lot harder to do.”

A recent multibillion-dollar oil deal between Russia and KDP officials could also allow Moscow to draw traditional US allies farther out of Washington’s sphere of influence.

These events came just days after Trump’s October 13 announcement that the Treasury Department would designate Tehran’s Islamic Revolutionary Guards Corps (IRGC) as a terrorist organization and slap new sanctions on the group. During his speech Trump also threatened that Washington may decide to withdraw unilaterally from the 2015 Iran nuclear deal.

However, Iran has demonstrated through its actions and those of its proxies that it is either actively countering Trump’s bellicose rhetoric with further escalation on the ground, or that it doesn’t take the president’s threats seriously when carrying out military operations abroad. In recent days, Iranian-backed Shiite militias have actively called for PUK forces to return to Kirkuk. PUK leaders, meanwhile, have openly toyed with the idea of Iraqi-government forces being stationed at local public facilities and institutions within the KRG north of the Green Line, generally recognized internationally since 2003 as the official border between the KRG and the Iraq’s central government.

All this comes as the KDP has fallen out with its closest regional ally, Turkey, over the independence referendum, even as it suffers from the effects of a protracted financial crisis. Whereas the KDP appears isolated, cash-strapped, and weak, the PUK appears strong, stable, and well integrated with its neighbors. And, far from containing Iran’s influence in the Middle East, over the past week the Trump administration has watched yet another domino begin to wobble before the regional march of the Islamic Republic.

The PUK Gives and Receives Concessions

In 2014, in the wake of ISIS’s rapid seizure of much of northern Iraq and the Iraqi Army’s headlong retreat southward, Kurdish peshmerga under the PUK seized Kirkuk. Last week, PUK units withdrew, relinquishing control to PMF and Iraqi Army forces after putting up a brief resistance, which according to the PUK cost the lives of nearly 100 of its soldiers. Reports have claimed that the takeover came after a deal between the PUK and Baghdad was brokered by IRGC Quds Force Gen. Qassem Suleimani. In the past several years, Suleimani has regularly been seen commanding Iranian-backed Afghan, Iraqi, and Lebanese Shiite militias in Iraq and Syria against both ISIS and moderate Syrian rebel groups that are fighting Syrian President Bashar al-Assad’s forces.

As the narrative goes, Suleimani—who made a public appearance in the PUK-controlled city of Sulaymaniyah earlier this month to visit the grave of Jalal Talabani, former PUK chairman and longtime party patriarch—offered the PUK a series of concessions in exchange for its withdrawal from Kirkuk.

Many within Kurdistan, including some within the PUK, have acknowledged the truth behind this claim. “The Talabanis are responsible for the disaster that befell Kirkuk,” said Rewaz Fayaq, chairwoman of the PUK’s bloc in the KRG Parliament. “The Talabani family conducted meetings with Qassem Suleimani in Sulaymaniyah and Kirkuk and drafted a plan to deliver the city in exchange for special privileges.” In light of these revelations, Fayaq and others within the PUK have begun to distance themselves from the Talabanis. “This decision was not taken with the support of PUK party ranks, and we don’t support it,” she said.

Despite the media’s portrayal of the loss of Kirkuk as a loss for Kurds, recent reports suggest that PUK forces remain in the area. “The Talabani family dominates the PUK decision-making bodies,” said Michael Knights, a researcher at the Washington Institute for Near East Policy. “They likely knew about the impending Iraqi Army and PMF assault before it occurred, and extracted concessions for their benefit accordingly. Receiving salaries from Baghdad and having their people placed in oil facilities in and around Kirkuk, particularly in those formerly controlled by the KDP, has been a goal of the PUK for years.”

The notion that Baghdad would allow PUK fighters to remain in Kirkuk after its fall was practically confirmed on October 19, when Ala Talabani—a PUK MP in Iraq’s Parliament and niece of Jalal Talabani, and in turn a member of the PUK’s leading decision-making circle—appeared on Iraqi television with Qais al-Khazali, chairman of Iraq’s Shiite Asa’ib Ahl al-Haq PMF militia, which took part in the battle of Kirkuk.

Al-Khazali, who was arrested in 2007 and detained for nearly three years by Western coalition forces for orchestrating the death of US soldiers in Karbala, summarized the meeting held between the two, saying, “We must exert our fullest efforts to stabilize the situation, and to undermine all opportunities and attempts made by those who seek to secede [from Iraq].… That said, we are calling for a number of steps to be taken, among them…a joint administration [for Kirkuk] in which PUK Peshmerga will take part.”

Other concessions allegedly granted to the PUK include the payment of PUK party cadre salaries out of the central-government budget and assurances that all border crossings and airways between Baghdad, Iran, and PUK-controlled territory in the KRG will remain open for the foreseeable future.

“Keeping transportation routes open is a huge benefit for the PUK, and in light of recent measures taken against KRG as a whole, would be a huge incentive for PUK leaders to reach a compromise with the Iraqi Army and PMF over the status of Kirkuk,” said former ambassador Ford. “The PUK got to live to fight another day, and have sought to protect their interests in the meantime.”

Such promises are significant, as both Iran and Turkey have taken steps since the September 25 referendum to isolate the KRG from neighboring countries, either by shutting off airspace or imposing economic blockades on commerce coming out of the region.

Despite these revelations, both Ala and Bafel Talabani (the latter is Jalal Talabani’s son) and others have denied that there was an explicit agreement to withdraw from Kirkuk in exchange for special rights. They attribute the overnight withdrawal to superior firepower by the Iraqi Army and PMF compared to PUK and KDP forces.

“Our withdrawal from Kirkuk was tactical,” said Wasta Rasul, commander of PUK forces in Kirkuk. “We lost nearly 100 soldiers in the initial hours of fighting, and reached the conclusion that it wasn’t worth risking collateral damage and thousands of PUK lives for a battle we were likely to lose.” This claim is supported by the fact that KDP forces—which have not been accused of reaching a deal with Iran and Baghdad—withdrew from other disputed territories, such as Sinjar, Gwer, and Dibis, under the threat of superior Iraqi Army/PMF firepower.

Nonetheless, in the days after Kirkuk’s fall, both Bafel and Ala Talabani have gone a step further, publicly ingratiating themselves with the regional and international community—in particular Turkey and Iran, both of which possess sizable Kurdish minorities—by openly speaking out against the KDP-led independence referendum, in addition to calling for other concessions to Baghdad that were never previously on the table.

On October 20, Bafel Talabani appeared in an interview on France 24, during which he described the referendum as a “colossal mistake.” Two days earlier, in an interview on Iraqi television, Ala Talabani stated, “I don’t deny that Qassem Suleimani and our neighbor Iran have a hand in much of what goes on in the region. They play a positive role by providing us counsel and advice. Qassem Suleimani gave us the same advice we got from the [Iraqi] Prime Minister [Haider al-Abadi]…which was, ‘Let’s reach an understanding, quit being so stubborn, and forget this idea of a referendum.’” Ala has repeatedly referred to the referendum in other interviews as having been “careless.”

In another interview conducted the same day, Ala went on to support the idea of Iraqi government troops being stationed at Kurdish airports and border crossings between the KRG and territories controlled by Iraq’s central government. Such a statement from a Kurdish official is nearly unprecedented, and would mean accepting the presence of Iraqi government troops north of the 2003 Green Line. If such a suggestion were implemented, it would mark the first instance of Iraqi government troops in the KRG since 1997, when Saddam Hussein’s Republican Guards intervened on behalf of the KDP in the Iraqi-Kurdish civil war.

The fact that PUK representatives are calling for Iraqi troops to cross the 2003 Green Line while Iranian-backed Shiite militias are calling for PUK peshmerga to help administer Kirkuk leaves less than a shadow of a doubt as to the current trajectory of regional geopolitics in the KRG. As recently as October 22, US Secretary of State Tillerson publicly called for Iran-backed Shiite militias to leave Iraq, as their job combating ISIS was now over. Iraqi Prime Minister Abadi countered by insisting that the PMF were“patriots” whose efforts were an inspiration and “hope of country and the region.” Two days later, during the prime minister’s weekly press conference to Iraqi media, Abadi furthermore warned Iraqi politicians to “stay away from all foreign agendas,” which many have interpreted as a swipe against Tillerson. Iran, along with its Arab and Kurdish proxies, seems to be gaining ground in northern Iraq.

The KDP Loses Its Oil

While the PUK has made gains in and around Kirkuk, the KDP has lost significantly. In mid-October, Iraqi Security Forces took control over the Bai Hassan and Avana Dome oil facilities in and around Kirkuk, which prior to the takeover had been overseen by KDP forces operating through the KAR Group.

These two fields alone produce 280,000 barrels per day and make up 45 percent of the KRG’s oil revenue. On the day of their loss, oil exports sent through the KRG’s Taq Taq pipeline allegedly dropped from 600,000 to 300,000 barrels per day. Meanwhile, the Iraqi government has announced plans to exploit these fields in the future by rerouting oil exports through a second pipeline, operated exclusively by Baghdad, known as the Kirkuk-Ceyhan pipeline. Already on October 18, Iraqi Oil Minister Jamal Luiebi announced that he had reached out to BP to conduct a reservoir assessment of the fields. This pipeline runs from Kirkuk through the Salah a-Din and Ninewah provinces—territory well outside the control of the KRG—before crossing north into Turkish territory via the Fishkhabur border crossing.

Following the expansion of ISIS in 2014, parts of the Kirkuk-Ceyhan pipeline were destroyed by the terror group. As ISIS retreats from northern Iraq, Baghdad can begin making repairs to the pipeline’s infrastructure. All that’s left is for Iraqi forces to retake the Fishkhabur crossing (currently controlled by the KDP), a campaign that PMF forces have already begun. In recent days, the latter have wrested control of several key areas near Fishkhabur from the KDP, including the Sinjar mountain range, where ISIS massacres of Yazidi civilians in August 2014 sparked an international outcry, prompting the United States and other foreign powers to launch their campaign to destroy the terror group. As The Nation went to press, fighting in the area was ongoing.

The KRG was plagued by financial crisis even before the fall of Kirkuk, partly because of the recent sharp drop in oil prices; the loss of that city and its oil fields will undoubtedly plunge the Kurdish region into a much worse recession. Currently, the KRG is indebted to the tune of $20 billion to both domestic and international creditors, and as a result has been able to pay only 25 percent of the salaries of its civil servants. As the PUK secures strategic benefits for itself in the aftermath of the assault on Kirkuk, it will likely be the KDP that continues to bear the brunt of the KRG’s current and future economic crisis.

The KDP’s Lifeline: Moscow and PUK Splits

Despite these short-term setbacks, several key events and trends may work to the KDP’s benefit in the medium to long term. Foremost among these is a deal reached last September between the KDP-affiliated KAR Group and Rosneft, Russia’s majority-state-owned oil company, which is thought to be close to Russian President Vladimir Putin. The deal called for Rosneft to invest $1 billion in the KRG’s Taq Taq pipeline to Turkey, in the hopes of raising its export capacity to 1 million barrels per day.

This brings the total amount of pledged Russian investment in the KRG’s petroleum sector to $4 billion since last December, a massive windfall for Erbil, and one that makes Moscow perhaps the largest single international investor in the KRG region. In addition to providing the cash-strapped KRG with a much-needed lifeline, Russia’s involvement in the region is notable in that Moscow is effectively the only regional and international power to remain neutral on the status of the September KRG independence referendum.

Whereas the United States may have angered Kurds with its refusal to endorse the legitimacy of the referendum—which passed with 93 percent of the vote—Russia’s neutral stance may yet earn it the reputation of supporter of Kurdish self-determination, much to Washington’s chagrin. Russia’s position toward the KRG was reinforced on October 23, when Russian Foreign Minister Sergey Lavrov stated that Moscow and Rosneft would seek to increase their involvement in the KRG petroleum sector in the near future, adding that Russia “would not abandon the Kurds.” Also on October 24, Russia’s deputy prime minister for the defense industry, Dmitry Rogozin, declared that Moscow intended a “full-scale return” to Iraq—diplomatically, economically, and, potentially, militarily.

Furthermore, the PUK’s ascendancy may yet collapse under its own weight. Though propped up by outside powers, the PUK leadership’s decision to denounce the popular independence referendum has earned it the ire of many—and not only in the Kurdish street but also among its highest party ranks. Kosrat Rasul, PUK member and vice president of the KRG region, referred to the loss of Kirkuk as Kurdistan’s “second Anfal,” a reference to Saddam Hussein’s brutal campaign of ethnic cleansing against Kurds in the late 1980s, which killed an estimated 100,000 civilians. Other PUK leaders, such as former Kirkuk governor Najm al-Din Karim and chairman of the PUK politburo Mala Bakhtiyar, have openly criticized the Talabani family, saying their actions may lead to civil war within Kurdistan.

Ala Talabani herself has acknowledged the split within the party, saying on October 18 about the PUK that “it’s undeniable we’ve become [separated] into two camps…after the death of [Jalal Talabani], there was no longer unity within [the PUK] regarding decision making. That said, a group within the Politburo began making decisions without consulting the remainder of the party leadership…. these are the same people that call us traitors, us being Bafel Talabani, and others.”

Anger toward the PUK leadership over its position on Kirkuk will likely boil over on the Kurdish street as well. A member of the Kurdish security forces, who asked to remain anonymous because of the sensitivity of the situation, hinted that after the fall of Kirkuk PUK militia members began defecting to the KDP and are now helping to prop up the new front lines separating Iraqi Army and PMF units from Kurdish peshmerga. Over the past week, Kurds in Erbil have been protesting in front of the American embassy against Washington’s perceived inaction.

These are all circumstances that the KDP can take advantage of to shore up its position and portray itself as the true defender of the KRG’s interests. Baghdad may have made gains over the past week, but dealing with an angry, unruly Kurdish populace may be more than it can handle. And while Iran and its proxies may also have gained significant ground in and around Kirkuk, their fortunes could soon change too. Whether or not this will play out to America’s interests, however, is anyone’s guess.