ERBIL, Kurdistan Region - With over 500,000 barrels of oil produced per day (bpd) in April, the Kurdish export of its crude is almost back on track after a number of serious disruptions halted the flow over the past months, an official report from the Kurdish oil ministry shows. According to the data, just over 15 million barrels of oil were exported in April to the Ceyhan Port on the Turkish west coast, which amounted to over $376 million for the same period, a nearly 50 percent increase over previous months. The total revenues for the first four months of this year amount to over $1,887 million, with the highest levels of exports recorded in January at 601,000 bpd. Several bombings targeting the Kurdistan pipeline in February and March led to a temporary halt of export to Turkey for nearly four weeks, depriving the Kurdish government of its key source of revenues. Kurdish authorities have accused the guerrillas of the Kurdistan Workers’ Party of the bombings, a claim often rejected by the PKK. The 550-kilometer-long Kurdistan pipeline which connects Kurdish oil wells to the Turkish network in the north was built over the past years as part of a larger infrastructure to upgrade the oil industry. It is planned to facilitate the export of 1 million bpd by the end of 2016, including from the vast oil fields in Kirkuk. As parts of the Iraqi pipeline fell to ISIS militants in 2014, Baghdad signed a deal with the Kurdistan Regional Government (KRG) to use the Kurdish pipeline for the shipment of its northern oil. The KRG has a strategic oil deal with neighboring Turkey, which is planned to expand over the coming 50 years. Both Erbil and Ankara hope the deal, which they have called an understanding, will revive the economy on both sides of the borders in Kurdish areas. Turkey has invested heavily in the Kurdistan Region’s construction sector since late 2000, raising the level of cross-border trade. Although crude prices have seen a notable increase in April to nearly $50 a barrel from around $30 earlier this year, the dramatic drop has had unexpected and a devastating impact on the Kurdish economy, which relies almost exclusively on oil sales. The plummeting prices have also affected Iraqi finances. But while Baghdad has relied on its cash reserves and international loan packages, Erbil has been left with billions of dollars in debt as it pays its government employees. Both Baghdad and Erbil have been taking preemptive steps to address the double shock of the Islamic State in Iraq and the swift collapse of global oil prices by reducing government expenditures. The Iraqi central government has so far been able to pay monthly wages to its employees in part since it has had access to its $78 billion international reserve assets. According to the International Monetary Fund (IMF) the country’s reserves fell to $66 billion since the end of 2013.
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