$2 billion losses inflicted on Iraqi Kurdistan due to oil exports halt
A worker adjusting a valve at an oil refinery in the Kurdistan region of Iraq. Photo: AFP
Baghdad (IraqiNews.com) – Iraq is working to start technical talks with Turkey by early next week on the resumption of oil exports from northern Iraq, but hopes appear low that a quick solution can be reached, sources told Reuters.
Turkey stopped Iraq’s exports of 450,000 barrels per day through the oil pipeline that extends from the Kurdistan region of Iraq to the Turkish port of Ceyhan on March 25.
The 80-day halt of oil exports from the Kurdistan region of Iraq cost the Kurdistan Regional Government (KRG) more than $2 billion, Reuters reported.
Sources revealed that discussions at a technical level regarding the resumption of exports between Iraq and Turkey are scheduled to take place during the weekend or early next week.
The Turkish state energy company said that the pipeline needs further technical examination and it will send a technical report regarding the status of the pipeline in the coming days, an official in the oil sector in Iraq told Reuters.
The official clarified that the step does not necessarily imply the resumption of oil exports immediately because this decision requires high-level political talks. He added that a Turkish energy delegation is expected to arrive in Baghdad but did not specify a date.
Turkey’s decision to suspend oil exports followed an arbitration decision issued by the International Chamber of Commerce (ICC) that obliged Turkey to pay Baghdad $1.5 billion in compensation for damages caused by the KRG’s export of oil without permission from the federal government in Baghdad between 2014 and 2018.
Attempts to resume oil exports from Iraqi Kurdistan were delayed because of the Turkish presidential elections and discussions between the State Organization for Marketing of Oil (SOMO) and the KRG over an oil export deal.
The Kurdistan region of Iraq suffers from a lack of liquidity due to the suspension of oil exports through the pipeline.
Iraqi politicians and Kurdish lawmakers said that Iraqi Kurdistan had no other choice but to accept 12.67 percent of the $153 billion budget approved by the Iraqi Parliament last Monday.