According to KurdPress, the report by the National Context magazine, titled "The Emerging Strategic Geography of the Kurdistan Region," presents a picture of the different ways in which the two ruling parties in the Kurdistan Region, the Kurdistan Democratic Party of Iraq and the Patriotic Union of Kurdistan, control over economic resources and networks. The main thrust of the report is that the economic balance between the two parties is not measured solely by the amount of income or the number of parliamentary seats, but rather control over strategic assets and the degree of interdependence of the areas under their influence has become increasingly important.In the Democratic Party model, economic power is based on “scale and breadth.” The majority of the producing oil fields, the main refining capacity, the Fishkhabur export route to Turkey, and a large part of the manufacturing industries are located on the Erbil-Dohuk axis. The steel, pharmaceutical, food, plastic, packaging, aluminum, and construction materials industries also complete this network. The Democratic Party thus controls an extensive network of production, refining, logistics, and exports.

However, the report emphasizes that the Democratic Party can no longer independently turn this economic geography into political leverage as it used to. After the change in the oil sales mechanism, the Iraqi Oil Marketing Organization (SOMO) takes over the oil sales, and international companies also operate with a new mechanism.Thus, the Democratic Party still controls the geography of oil, refineries, and export routes, but the commercial and revenue side of this network has become more dependent on Baghdad than ever before.

The report then points to the renewed importance of the Iraq-Turkey oil route. The closure of the Strait of Hormuz on February 28 made the northern route one of the most vital routes for Iraqi oil exports, and Baghdad is pursuing the goal of increasing oil transport from about 220,000 barrels per day to 770,000 barrels per day. As a result, the Democratic Party has lost some of its commercial independence, but on the other hand, the geopolitical importance of the geography under its control has increased, as this route has become important to both Baghdad and Washington.

On the other hand, the Patriotic Union model is based on the “depth and integrity” of resources. The party’s most important asset is gas.The development of the Khur Mor field has increased its processing capacity to 750 million cubic feet per day, and production has reached about 700 million cubic feet per day. The importance of this gas is not simply in the revenue it generates from its sales; Khur Mor gas fuels a large part of the region’s electricity generation, and is thus directly connected to electricity, households, factories, and everyday economic activity.

This difference is crucial: oil can be extracted and its revenue spent in various sectors, but gas is locked into the grid of electricity generation and industry. Thus, control of gas gives the Patriotic Union a kind of structural leverage that is not limited to direct revenue.

The next step is for the Patriotic Union to try to transform control of gas into control of the industrial chain.The Chamchamal field and gas sales contracts to industries in the Baziyan region connect the gas from the Patriotic Union’s sphere of influence directly to the cement, steel and power plants industries. According to the report, six industrial consumers have signed long-term contracts to receive gas, and a 40-kilometer pipeline is set to transport the field’s gas to industrial consumers in Baziyan.

From this perspective, the Patriotic Union is creating a relatively complete economic chain: gas, power generation, energy-intensive industries, steel and cement. This chain is centered in the Baziyan field and then expanded through Sulaymaniyah and Erbil and the Iraqi market. The use of domestic gas instead of fuel oil could also reduce the cost of production for industries, thereby increasing the competitive advantage of industries located in the region.

The report goes on to say that the Patriotic Union’s economic axis is not limited to Baziyan.The Arabat and Sulaymaniyah region is emerging as a more diversified hub for the production of aluminum, metals, plastics, construction products, pharmaceuticals, and food. Thus, in the PUK economic model, Baziyan-Chamchamal becomes a hub for heavy and energy-intensive industries, and Sulaymaniyah-Arbat plays the role of a hub for diversified production.

Another important point is the market orientation of the two models. The Democrat Party economy is more connected to the Erbil-Dohuk, Zakho, Turkey, and foreign markets network; while the PUK economy is increasingly connected to the Sulaymaniyah-Baziyan-Chamchamal-Kirkuk axis and the Iraqi federal market. The report believes that this route will allow the PUK to connect part of its economy to the Iraqi market without going through Erbil and the Turkish route.Therefore, the way the two parties control resources can be summarized as follows:

KDPI: control of oil, refining, logistics, the Turkish route, diversified industrial production and links to foreign markets.

PUK: control of gas, electricity, energy-intensive industries, bazaars, diverse industries in Sulaymaniyah and economic links with Kirkuk and Baghdad.

The report states that the KP still has a larger, more extensive and more resilient economy; but the PUK is building an economy with greater vertical integration. In other words, the KP’s advantage is in “network breadth” and the PUK’s advantage is in “production chain depth”.

The political significance of this situation is evident in the crisis of the formation of the Kurdistan Regional Government.The Democratic Party won 39 seats in the October 2024 elections to the PUK’s 23, and based on this electoral advantage, it wants an institutional position commensurate with its electoral power. But the PUK, in addition to its independent territorial and security structure, has more material leverage to resist becoming a “junior partner” through Baghdad and Kirkuk, and now through gas and industrial resources.

Consequently, from the perspective of National Context, the political impasse in the region is not simply a fight over ministries. The main disagreement is over how “power” should be measured: by the number of seats, the size of the economy, and external access, or by control of vital resources, energy, security, industry, and access to Baghdad. The Democratic Party has the upper hand on the first criterion; the PUK is strengthening its position on the second criterion.In a sentence, the main message of the report is this: The Democratic Party still controls the larger economy of the Kurdistan Region, but the Patriotic Union is gradually taking over resources that the Democratic Party’s economy cannot easily replace; for this reason, the Democratic Party’s electoral advantage can no longer be easily converted into institutional and political advantage.