Iraq’s leaders have overcome many hurdles in their struggle to rebuild their country after the ouster of Saddam Hussein in 2003.  But agreeing on the fate of the “ethnic tinderbox” of oil-producing Kirkuk is a particularly testing one.

Why has Kirkuk proven to be such an obstacle? For many, settling its fate seems to be an easy task.

The dispute largely revolves around Kurdish demands to incorporate the city into their autonomous northern Iraq region.  Arabs and Turkmens want the city to remain under the control of the Iraqi government as it has always been.

For an outsider the dispute might seem to be an administrative question of who will manage the city but Kirkuk’s fate has taken on national and regional dimensions since U.S.-led forces toppled Saddam. It has fuelled the ethnic conflict between Arabs
and Kurds and drawn in regional powers, especially neighbouring Turkey.

Kurds look at the city inhabited by Arabs, Kurds and Turkmens as their historic capital, while Arabs and Turkmen argue it equally belongs to them.

While Sunnis and Shi’ite Arabs are locked in a power struggle across the country, they are united in rejecting ceding the city to the Kurdish autonomous region.

But Kirkuk is more than a piece of real estate inheritance. The city sits on a sea of “black gold” — Iraq’s biggest oil field, which has become more lucrative with crude prices above $100 a barrel.

From a regional perspective, Ankara opposes Kurdish control of Kirkuk not only out of concern for the rights of fellow Turkmens in Iraq but also because it will bolster its own Kurdish minority’s demands for autonomy.

Watching an independent Kurdistan gradually taking shape across its border, Ankara fears that Kirkuk’s oil could strengthen the autonomous region in the face of a weak central government in Baghdad, and realise Kurdish aspirations for a region-wide Kurdish state, possibly encompassing southern Turkey and parts of Iran and Syria.

After years of trying and failing, Iraqi leaders are trying to reassure friends and foes that they are close to a deal on the future of Kirkuk. But even if parliament adopts a compromise hammered out behind closed doors, it is difficult to see how it will be implemented.