Iraq expresses support of Kurdistan Region oil exports
ERBIL, Kurdistan Region - Iraq looks favorably upon the Kurdistan Region exporting its oil abroad and is concerned that the export halt might negatively impacting its economy amid ongoing discussions addressing next steps after an arbitration court ruling, the oil ministry said Tuesday.
“We fully support the export of the Kurdistan Region’s oil abroad and we should hurry to reach an agreement for the oil to be exported,” Assim Jihad, spokesperson for the Iraqi oil ministry, told Rudaw’s Sangar Abdulrahman, stressing that the court ruling ought to be implemented.
The Paris-based International Chamber of Commerce (ICC) ruled on Thursday in favor of the Iraqi government against Turkey with regards to the Kurdistan Regional Government’s (KRG) oil exports through Turkey’s Ceyhan port, placing Iraq’s State Oil Marketing Organization (SOMO) as the only party in charge of the management of export operations through the port.
Following the decision, Turkey informed Iraq that Ankara would no longer allow KRG crude to be loaded onto ships at Ceyhan port without permission from Baghdad.
“The best way for oil to get exported through SOMO and for the Kurdistan Region to get its share,” Jihad added, explaining that SOMO seeks to sell the oil at the global market rate and that such a decision is favorable towards the Region.
The production of around 450,000 barrels of oil per day in the Kurdistan Region has been jeopardized as a halt in exports has forced international oil companies (IOCs) operating in the region to store produce rather than allow it to flow to the pipeline – an inadequate measure as storage capacity is limited.
“I call on our friends in the Kurdistan Region to follow this situation realistically … this situation is tied to an international court and this must be considered,” the spokesperson stressed.
The arbitration court ruled that Ankara had breached a 1973 pipeline agreement between Iraq and Turkey that obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq. In 2014, the KRG began using the pipeline to send its crude to Turkey’s Ceyhan port, to the ire of Baghdad.
An assistant to Kurdistan Region Prime Minister Masrour Barzani on Sunday said that the halt of independent oil exports by the KRG is temporary and that it is expected to resume once an agreement is struck with Baghdad.
On Monday, the US said it had urged Ankara and Baghdad to allow the resumption of the Region’s export of oil as “disruptions to global energy supply would not serve anyone’s interest.”
The KRG is heavily reliant on oil revenues and an inability to sell its crude will severely impact its economy. The government has found hardships for years to pay its over a million civil servants on time and in full.
A delegation visited Baghdad following the ruling but the outcome of the discussions remains unclear.
“We fully support the export of the Kurdistan Region’s oil abroad and we should hurry to reach an agreement for the oil to be exported,” Assim Jihad, spokesperson for the Iraqi oil ministry, told Rudaw’s Sangar Abdulrahman, stressing that the court ruling ought to be implemented.
The Paris-based International Chamber of Commerce (ICC) ruled on Thursday in favor of the Iraqi government against Turkey with regards to the Kurdistan Regional Government’s (KRG) oil exports through Turkey’s Ceyhan port, placing Iraq’s State Oil Marketing Organization (SOMO) as the only party in charge of the management of export operations through the port.
Following the decision, Turkey informed Iraq that Ankara would no longer allow KRG crude to be loaded onto ships at Ceyhan port without permission from Baghdad.
“The best way for oil to get exported through SOMO and for the Kurdistan Region to get its share,” Jihad added, explaining that SOMO seeks to sell the oil at the global market rate and that such a decision is favorable towards the Region.
The production of around 450,000 barrels of oil per day in the Kurdistan Region has been jeopardized as a halt in exports has forced international oil companies (IOCs) operating in the region to store produce rather than allow it to flow to the pipeline – an inadequate measure as storage capacity is limited.
“I call on our friends in the Kurdistan Region to follow this situation realistically … this situation is tied to an international court and this must be considered,” the spokesperson stressed.
The arbitration court ruled that Ankara had breached a 1973 pipeline agreement between Iraq and Turkey that obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq. In 2014, the KRG began using the pipeline to send its crude to Turkey’s Ceyhan port, to the ire of Baghdad.
An assistant to Kurdistan Region Prime Minister Masrour Barzani on Sunday said that the halt of independent oil exports by the KRG is temporary and that it is expected to resume once an agreement is struck with Baghdad.
On Monday, the US said it had urged Ankara and Baghdad to allow the resumption of the Region’s export of oil as “disruptions to global energy supply would not serve anyone’s interest.”
The KRG is heavily reliant on oil revenues and an inability to sell its crude will severely impact its economy. The government has found hardships for years to pay its over a million civil servants on time and in full.
A delegation visited Baghdad following the ruling but the outcome of the discussions remains unclear.