Oil flow from Iraqi Kurdistan to Turkey remains stopped, threatening sector
Oil flows to Turkey remain frozen following the agreement between Iraq and the Kurdistan Regional Government. The impasse could hurt the autonomous region’s oil sector and revenue.
The flow of oil from the Kurdistan Region of Iraq to Turkey remains halted amid a dispute between the Kurdistan Regional Government (KRG), the Iraqi federal government, and the Turkish government. One oil sector employee told Al-Monitor on Friday that a continued lapse in oil exports will significantly hurt the Kurdistan Region’s energy sector.
Background: In March, the Paris-based International Chamber of Commerce ruled in Iraq’s favor in its case against the Kurdistan Region exporting oil to Turkey. Per the ruling, Ankara was to pay Baghdad $1.5 billion for allowing unauthorized exports from 2014-2018. Turkey stopped the oil exports from the Kurdistan Region following news of the court ruling. In normal times, 450,000 barrels per day are exported from the Kurdistan Region into Turkey’s Ceyhan port. The federal Iraqi government also exports 70,000 barrels of oil per day to Turkey through Ceyhan.
Baghdad has sought greater control over the region’s energy industry for years, and in the past accused the KRG of not turning over oil in exchange for its share of the federal budget. Last year, the federal Iraqi Supreme Court ruled that the KRG’s legal basis for the exports was unconstitutional. The KRG, which developed a thriving energy sector independent of Baghdad following the 2003 US invasion, immediately disputed the ruling.
On April 4, the KRG announced that it reached an oil deal with the Iraqi federal government. The deal stipulated that Iraq’s state oil firm, SOMO, would be able to market the Kurdistan Region’s oil.
