Turkey's Iraq raid bumps up oil prices

Oil prices jumped sharply today after Turkish forces entered northern Iraq in search of Kurdish rebels, raising fears that the conflict would cut oil supplies from the region.

Industry analysts fear Kurdish rebels will respond by sabotaging the oil pipeline that runs from northern Iraq to Turkey.

The threat of just such a Turkish incursion into Iraq was one of the many factors behind oil’s rise to nearly 100 dollars a barrel last month.

While oil futures have since retreated from those highs on a view that global supplies of crude are growing as demand is falling, concerns about supply disruptions remain high.

The Turkish troops crossed into an area near the border with Iran, about 75 miles north of the city of Irbil.

On Sunday, Turkey carried out airstrikes against rebels from the Kurdish Workers’ Party (PKK) in northern Iraq. As many as 50 fighter jets were involved in the attack, the biggest against the PKK in years.

Meanwhile US Secretary of State Condoleezza Rice in a surprise visit to Iraq said that the United States, Iraq and Turkey have a “common interest” in stopping Kurdish rebels in the north of the country, but cautioned against taking any action that could destabilise the region.

She made it clear the United States supported efforts to quash any rebel movement, but she said it was a “Turkish decision” to act.

And she suggested that Iraqi, Turkish and US authorities should try to work together against the rebels.

Rice began her unannounced visit with a trip to Kirkuk in the oil-rich Kurdish northern region.

Kirkuk is an area coveted by both the Shiite-dominated Iraqi government in Baghdad and the Kurdish one in Irbil.

Kurds want to incorporate it into their self-rule area, but the idea has met resistance from Arabs.

Much of Iraq’s vast oil wealth lies under the ground in the region, as well as in the Shiite-controlled south.

Kurds refer to Kirkuk as the “Kurdish Jerusalem,” and control of the area’s oil resources and its cultural attachment to Kurdistan have been hotly contested.