Iraq’s Oil Exports Still Seeing 450,000 bpd Hiccup
Turkey still hasn’t resumed the flow of crude oil from Iraq, with 450,000 bpd in Iraqi oil exports still offline, anonymous sources told Reuters on Friday.
The International Chamber of Commerce (ICC) ruled three weeks ago that Turkey must pay Iraq $1.5 billion in damages for receiving oil from the semi-autonomous Kurdistan region in Iraq without Baghdad’s permission from 2014 to 2018. Turkey responded by halting the flow of crude oil overseen by the Kurdistan Regional Government.
The flows have not resumed despite a temporary agreement that was signed between Iraq and the KRG more than a week ago. Reuters sources have suggested Baghdad has not yet requested that Turkey reopen the pipeline. Turkey previously stated that it wishes to negotiate the $1.5 billion payment, and it wants a resolution on another arbitration case involving the same oil exports to Turkey from the KRG, except this one covers shipments from 2018 onward.
Turkey is holding out for in-person negotiations to take place, Reuters sources said.
The fallout of the halted flows are multifaceted, with the KRG stripped of more than half a billion dollars in oil revenues, 450,000 bpd of crude oil taken off the global market, and Iraq petitioning a U.S. federal court to enforce the arbitration award.
Baghdad said earlier this month that it would work on passing a federal law detailing how oil export revenues would be shared with the Kurdistan Regional Government, referring to it as “a crucial step towards ending the long-standing dispute,” and “creating a positive and safe atmosphere to finally approve the national oil and gas law.”
A deal ending the long-running dispute between Erbil and Baghdad could be reached, but until Turkey reopens the pipeline, their efforts to reach an agreement could be fruitless.
SOURCE – OILPRICE.COM