Who will blink first?

Recognize my oil deals first then I will let you have the revenues you need, that's the condition set by Iraq's northern semi-autonomous Kurdish region on Tuesday to the central government in Baghdad to resume oil exports, The Associated Press reports.

The Kurdish reply came after numerous statements made by Iraq's new Oil Minister, Abdul-Karim Elaibi, that his Ministry is ready to receive all the oil produced to export it , have the revenues and will pay only the costs incurred by the developers until a final solution is reached on the deals .

Ali Hussein Balo, an adviser to the Kurdish Ministry of Natural Resources said the crude-rich region can significantly contribute to the nation's target of raising oil exports next year by shipping 150,000 barrels a day out of the country, but only if all "our deals are recognized officially in a signed paper by Baghdad," he told the AP.

Again, we are witnessing a psychological warfare between the Kurds and Arab-led government.

The Kurds are trying to play a hardball to get their controversial oil deals recognized by Baghdad which needs each drop of oil produced to generate the sorely needed cash. While Baghdad is trying to make use of the pressure the Kurds face from oil companies who want to end this nightmare and to get their money back.

In less than a week, Baghdad twice announced remarkable increases to it's daily production from around 2.4 million barrels a day to more than 2.6 million barrels now. It promises more increases in the future as if it is telling the Kurds that I can spare your contribution so you have two options; either to accept my condition or keep you oil underground.

Who will blink first?

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