To be sure, the path to Kurdish sovereignty runs steeply uphill, with Iraqi unity remaining the official U.S. policy and the KRG beset by internal divisions and an economic slowdown. But Kurdish leaders say their case for sovereignty — whether as an independent state or as part of a confederation with the rest of Iraq — has never been stronger than it is entering the new year. Late last month, KRG President Masoud Barzani instructed his party, the KDP, to organize a referendum on independence. A few months earlier he said at a think tank in Washington, “I don’t know whether it happens next year or when, but independence is certainly coming.”

This newfound confidence stems from a variety of factors. One is that the ISIL crisis has convinced many in the United States that Iraq’s federalist system, in which Baghdad has executive power over everything from oil revenues to foreign policy, is a failure — a case the Kurds have made for years. Washington’s opposition to breaking up the Iraqi state after toppling Saddam Hussein, under what has come to be known as the one-Iraq policy, has been perhaps the biggest obstacle to Kurdish sovereignty. But Baghdad’s failures to incorporate Iraq’s ethnoreligious communities has been laid bare by ISIL’s success, which exploited local Sunni minority resentment toward the sectarian, Shia-led central government of then–Prime Minister Nouri al-Maliki.

“I don’t think the U.S. will ever initiate the breakup of Iraq, but the question is whether they’d stop opposing it,” said Djene Rhys Bajalan, a lecturer at the American University of Iraq in Sulaimani in Kurdistan. The “dysfunctional” Iraqi government and its growing ties to Tehran have made it “impossible to make the case to support Baghdad … I think the legitimacy of the one-Iraq policy is deteriorating, and people are gradually seeing it as untenable.”

Meanwhile, the Kurds’ exploits on the battlefield, including their high-profile victory in the Syrian town of Kobane, have endeared them to many American policymakers fed up with the failures of the U.S.-backed Iraqi army — several divisions of which fled their posts in June 2014 as ISIL approached. In an effort to capitalize on this moment of pro-Kurdish sentiment, Kurdish lobbyists have deployed to Washington to advocate legislation that would allow the U.S. to arm the Kurds directly rather than through the government in Baghdad. That bill has accrued considerable bipartisan support in the House, where its backers have framed the bill as critical to defeating ISIL. The 2016 GOP presidential candidates are also on board, with Florida Gov. Jeb Bush saying at last month’s CNN debate, “We need to arm directly the Kurds … [They] are the greatest fighting force and our strongest allies” — perhaps referring to both the Iraqi peshmerga and Syrian Kurdish factions, which the U.S. is also backing.

But changing minds on Capitol Hill is just one battle. New challenges to Barzani’s KDP have emerged in the form of looming internal crises, including a severe economic slowdown that has been exacerbated by the war on ISIL and low oil prices. The World Bank recently announced that the KRG needs at least $1.4 billion in aid to stabilize the economy after growth plummeted to 3 percent in 2014, from 8 percent in 2013. In recent months, the government has had to cut off pay to civil servants, most notably the much-celebrated peshmerga fighters who are risking their lives on the front lines against ISIL. His government argues that much of the economic drag is due to Baghdad’s withholding oil revenues from the Kurds as well as foreign aid for the 1 million displaced people who have taken shelter in Kurdish lands.

Critics, however, accuse Barzani of mounting a renewed independence campaign precisely in order to distract attention from these more pressing internal questions. He has already used the fight against ISIL as justification for remaining in his post past his scheduled term limit, stoking a succession debate that briefly erupted into violence in August. As Kawa Hassan, the director of the Middle East and North Africa program at the EastWest Institute, put it, “Iraq is a failed state, but Kurdistan is also a failed region.” So severe are the KRG’s internal crises that some politicians have suggested Barzani suspend the independence talk until the economy and fight against ISIL stabilize. Though independence will always be a rallying cry for the Kurdish population, said Bajalan, “people are increasingly concerned with bread-and-butter issues like corruption and the constitutional crisis.”

Even so, analysts say Kurdish military successes against ISIL have led to new facts on the ground that would be more conducive to a sovereign Kurdish state. Among the over 8,000 square miles of territory the Kurds have captured are several cities that are disputed among Iraq’s ethnic patchwork but that the Kurds consider historically theirs, including Sinjar and the oil-rich city of Kirkuk. There are new economic realities too, including the beginnings of a Kurdish petro-state in defiance of Baghdad's orders. The Kurds have long sought to expand their independent oil exports, which are technically banned by Iraqi law and opposed by the U.S. and other regional powers. But after the Kurds claimed the regional oil capital of Kirkuk in 2014, they immediately began to pump out hundreds of thousands of barrels per day via a pipeline into Turkey. In early January, Erbil announced it would increase independent oil exports to cover budget shortfalls and would stop delivering to Baghdad.

This oil could be critical in swaying Ankara to come on board with the idea of an independent Kurdish state in Iraq, even amid Turkey’s escalating crackdown on its own Kurdish insurgency, the PKK. Though Turkey has formally opposed any form of Kurdish sovereignty in the region — significant because an independent Iraqi Kurdistan would be landlocked and reliant on Turkey (in addition to Baghdad) for trade, especially of its oil — the KRG has a complicated relationship, at best, with the PKK. And analysts note that Ankara is particularly keen to wean itself off Russian energy exports at the moment, given heightened tensions over Syria and Turkey’s shooting down of a Russian fighter jet that allegedly crossed into its airspace in November.

Kurdistan watchers say there are too many wild cards to know for sure where this current sovereignty push is heading. Hassan, who is also a nonresident scholar at the Carnegie Middle East Center in Beirut, said he saw a “fragmented future” for the KRG. But he has learned at least one lesson from the past year and a half. “I don’t dare to make any predictions,” he said. “Who thought a couple of months back that Russia would enter the war in Syria? That Turkey would down a Russian jet? Who thought Saudi [Arabia] would start a war in Yemen or build a new coalition against [ISIL]?”

“The Middle East is changing so rapidly and so fundamentally,” he said. “And this provides an opportunity for the Kurds to try and push for independence or at least some kind of confederation between Kurdish areas. If they are united, they can capitalize on this opportunity.”

That the ISIL crisis has brought mixed blessings to the Kurds is not lost on Bakir, the foreign minister. “How can you talk about sovereignty when one-third of your territory is under the control of [ISIL]?” he asked. But he noted that “the peshmerga have shed more blood in liberating our land than anyone else.” Sovereignty is not an opportunity, he said, but rather it is “the right of a people, the right of a nation that history has betrayed. Today we have an opportunity to benefit.”