Saturday, June 22, 2024

Baghdad

Iraq suffers losses due to Kurdistan’s oil exports halt

 Iraq suffers losses due to Kurdistan’s oil exports halt

A worker adjusts valve gears of pipes linked to oil tanks at Turkey’s port of Ceyhan. Photo: Reuters

Baghdad (IraqiNews.com) – An official in the Kurdistan Regional Government (KRG) revealed on Monday that a joint delegation from the Iraqi Ministry of Oil and the Ministry of Natural Resources in the Kurdistan region of Iraq will visit the Turkish capital, Ankara, to discuss the resumption of oil exports through the Turkish port of Ceyhan, after it was suspended for more than a month, following an international judicial decision, Al-Araby Al-Jadeed reported.

The official explained that the delegation will discuss with Turkish officials the possibility of resuming oil exports again through the Turkish port of Ceyhan after a suspension lasted for about 40 days.

The Iraqi official clarified that the delegation will discuss details of oil contracts with four international companies to ensure the resumption of oil exports through the State Organization for Marketing of Oil (SOMO), before reaching the Turkish port of Ceyhan.

On March 25, Turkey stopped shipping Kurdistan’s oil to the port of Ceyhan, after an international arbitration decision obligated Ankara to pay compensation to Baghdad for violating the 1973 pipeline agreement, by allowing Kurdistan’s oil to be exported without the approval of the federal government in Baghdad.

The oil pipeline, which extends from Kirkuk in the Kurdistan region of Iraq to the Turkish port of Ceyhan, is the only export route for the crude oil produced by oil fields in northern Iraq.

Bahjat Ahmed, an expert in oil affairs, confirmed that Turkey refuses to resume oil exports because the Iraqi government does not waive the compensation amount imposed by the International Court of Arbitration in Paris, which is 1.47 billion USD.

Ahmed explained that the other condition for Turkey is its demand to sell oil exported from Kurdistan at the previous price, which is 19 USD per barrel, but the Iraqi government, specifically SOMO, rejected Turkey’s request.

The oil expert pointed out that Turkey is still following the agreement signed with the KRG, which allows Turkey to sell Kurdistan’s oil to Ankara at reduced prices, but this agreement became invalid following the Iraqi judiciary’s decision that canceled all oil agreements signed by the KRG.

The federal government and the KRG signed a temporary agreement on April 4 that paves the way for the resumption of oil exports, but it has not come into force yet.