How Proxy Strikes Are Undermining Iraq’s Energy Future
The Sarsang Attack Marks an Escalation in targeting U.S.-Linked Infrastructure.
In the early hours of this morning, 15th July 2025, a drone laden with explosives struck the Sarsang oil field in Iraq’s Kurdish-controlled Duhok province. The target was a facility operated by the U.S.-based HKN Energy. The attack ignited a fire, forced an operational halt but thankfully, no casualties. Emergency crews responded swiftly, extinguishing the blaze.
As regional proxy conflicts intensify, critical energy infrastructure increasingly in the crosshairs. The Kurdistan Regional Government (KRG) labelled the strike a terrorist act, citing it as part of a campaign to sabotage the region’s economic backbone.
No group has claimed responsibility. But according to preliminary reports by Kurdish security officials, the drone appears to have originated from territory under the control of Iran-aligned militias. The Islamic Resistance in Iraq, an umbrella term encompassing several of these groups, is widely suspected but not named directly. HKN Energy, meanwhile, has begun a formal damage assessment, while its presence in Iraq continues to spark political friction.
This is not an isolated incident. It follows a pattern, now near-routine, of low-intensity drone strikes on infrastructure in Iraq’s north. Just one day prior, on 14th July, multiple drones targeted the Khurmala oil field and Erbil International Airport both sites linked to U.S. military or commercial interests. While casualties have thus far been avoided, the economic disruption is growing more acute.
The nature of these attacks has become increasingly sophisticated, drones relatively low-cost but equipped with GPS and optical navigation are frequently deployed. Their ability to fly low and evade radar makes them difficult to intercept. And with each successive strike, the perception grows that air defences are lagging behind the threat. These drones don’t just inflict material damage they signal reach, impunity, and a capacity to disrupt at will.
On 3rd July, another drone was intercepted near Erbil airport. Kurdish authorities blamed the Popular Mobilization Forces (PMF), Iraq’s state-integrated but Iran-aligned militia coalition. Baghdad pushed back, citing lack of evidence. It’s a familiar situaiton. Kurdish officials point to Iranian proxies, Baghdad demurs, and the security vacuum persists. That same week, Kurdish officials upgraded security protocols around major oil installations, though details were not disclosed.
The attack on Sarsang occurred hours before HKN Energy signed a preliminary agreement with Iraq’s Oil Ministry to jointly develop the Hamrin field in Salaheddin province. The timing is unlikely to be coincidental. It suggests the strike may have been a signal to the Americans, the KRG, or even Baghdad itself.
HKN’s presence in Iraq has long stirred debate. In May, Baghdad lodged a complaint against the KRG for unilaterally signing gas deals with HKN and another U.S. firm. The federal government claims such agreements bypass constitutional authority. Erbil counters that its semi-autonomous status grants it discretion. Neither side has budged, and the legal stalemate has only widened the operational vacuum that Iran-backed militias are exploiting.
The drone warfare campaign is also shaped by regional dynamics. Iran views the U.S. military presence in Iraq approximately 2,500 troops as an ongoing threat. Escalations in Gaza and Lebanon have only sharpened Tehran’s resolve to challenge American influence across the region. In this view, targeting U.S.-linked energy operations in Kurdistan serves a dual purpose: weakening Washington’s allies while pressuring Baghdad to assert control over the KRG.
What happens if these drone strikes begin to succeed in halting long-term investment?
Foreign energy firms already view Kurdistan as high-risk. Insurance premiums have risen. So have security costs. If the attacks persist, projects like the Hamrin development could stall, or be abandoned. That would not only harm Kurdish revenues, but undermine Iraq’s broader ambition to stabilise oil exports and court international partners.
The U.S. Embassy in Baghdad issued a swift condemnation, calling on the Iraqi government to “prevent further such attacks” and protect American personnel and assets. But Washington’s influence in Iraq is no longer what it was.
For the KRG, the strategy is now complex. Its reliance on oil exports and by extension, on foreign operators like HKN is central to its autonomy. Yet this very reliance makes it vulnerable. Every alignment with U.S. interests invites retaliation. Baghdad’s lack of consistent support only deepens the sense of isolation. And without robust defensive systems, Kurdish authorities are left to absorb damage rather than deter it.
The drones are small, but their implications are large. They chip away at investor confidence. They test the limits of Iraq’s fragmented sovereignty. And they raise uncomfortable questions about the ability or willingness of state actors to rein in proxies that operate with near-total impunity.
Whether this latest strike on Sarsang will trigger a more decisive response remains unclear. But the pattern is familiar: plausible deniability, limited attribution, and little consequence. That may suit some regional players. But it leaves Kurdistan’s infrastructure exposed, and its future increasingly uncertain.
Baghdads Statement on the Attack:
Statement Two oil fields in the Kurdistan Region of Iraq were attacked by drones, posing a direct threat to the interests of Iraqis and an assault on the state's efforts to consolidate stability and advance development.
The nature and timing of these criminal acts indicate malicious intent aimed at disrupting the situation and harming Iraq and its vital institutions. Commander-in-Chief of the Armed Forces, Mr. Mohammed Shia al-Sudani, has directed the relevant authorities to launch an immediate and comprehensive investigation to identify the parties behind these attacks and to take firm measures to hold those involved accountable without hesitation or hesitation.
We also affirm that the Iraqi government, with all its institutions and agencies, will not allow any threat that harms the interests of the Iraqi people. It will take all necessary measures to protect vital facilities and strengthen its defense system, preventing the recurrence of such acts, preserving Iraq's sovereignty, and protecting the rights of its people.