Another step toward Iraq's breakup?

On the heels of the news last week that the regional Kurdish government in Iraq has signed thumbed its nose at Baghdad and signed four more deals with Western oil companies, we get this remarkable statement from Iraq's (Kurdish) president:

Iraqi President Jalal Talabani says he supports a U.S. Senate resolution that calls for the decentralization of Iraq into autonomous regions for Shi'ites, Sunnis and Kurds.

The non-binding Senate resolution adopted last month is opposed by the Bush administration and Iraqi Prime Minister Nouri al-Maliki.

But, Mr. Talabani said in an interview with CNN Sunday that the Senate proposal deserves consideration and does not undermine Iraq's unity.

I see most of the media has played up Talabani's statement that as many as 100,000 U.S. troops could be sent home by the end of next year… but the "decentralization" comments are the real news.

As we noted last week, the oil deals are a significant sign that the Kurds are asserting their own authority apart from Baghdad, a development that scares the government of Turkey like nobody's business.  So for Talabani to contradict the most influential Shiites and Sunnis in Iraq by supporting that Senate resolution is a pretty big indicator that the Kurds will keep pushing to go their own way, never mind Talabani's protestations that there's "no possibility" of Iraqi Kurdistan achieving independence.

This doesn't mean a new armed conflict in northern Iraq is just around the corner.  But the tinderbox just got a little more dry.  We'll be watching.

The Daily Reckoning