Oil prices headed lower on…
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In a move that will undoubtedly enrage the government in Iraq, and at the same time open the doors further for Kurdistan’s way to full autonomy from Baghdad, the Kurds have begun to independently sell their oil on international markets.
The trading houses that have purchased Kurdistan’s oil are Trafigura, and Vitol, two of the world’s largest, making it very difficult for Baghdad to retaliate.
Trafigura bought the first shipment of light Kurdish oil, which will be shipped in October via Powertrans trucks through Turkey. Vitol bought the second shipment of 12,000 tonnes, which will be ready at the end of the month. Each shipment is worth about $890 a tonne, meaning that the orders are in the region of $10 million.
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Officials in Baghdad are still claiming that independent deals agreed with Kurdistan are illegal and are no different from smuggling, however no one seems to be paying much attention to these threats.
The fact is that Kurdistan’s potential to become a major oil producer, is more attractive than Baghdad’s threats to cancel contracts held with them for oil extraction in the south, especially as Kurdistan offer far more favourable terms.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com