Kurdistan Has Lost $2 Billion Due To Its Oil Exports Saga

• The Kurdistan Regional Government has lost $2 billion due to the nearly three-month-long suspension of its oil exports via Turkey.
• Kurdistan has not exported oil from the Turkish port of Ceyhan on the Mediterranean since March 25 due to a dispute over who is in charge of exports.
• Iraq is now waiting for a final go-ahead from Turkey, but chances are low that exports will resume soon.  

The Kurdistan Regional Government (KRG) has lost $2 billion from oil revenues due to the nearly three-month-long suspension of Kurdish crude oil exports via Turkey, according to estimates by Reuters.

Iraq and the semi-autonomous region of Kurdistan have not exported crude oil from the Turkish port of Ceyhan on the Mediterranean since March 25, due to ongoing disputes about who is in charge of exports.  

Iraq, OPEC’s second-largest producer after Saudi Arabia, is currently exporting oil only via its southern oil export terminals. Around 450,000 barrels per day (bpd) of exports from the northern fields and from the semi-autonomous region of Kurdistan continue to be shut in due to a dispute over who should authorize the Kurdish exports.  

Kurdistan’s crude oil exports—around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets—were halted on March 25 by the federal government of Iraq.

The suspension of oil flows out of northern Iraq and Kurdistan via Ceyhan forced companies to either curtail or suspend production because of limited capacity at storage tanks.

Iraq exported on average 3.3 million bpd of oil in May, flat compared to April.

Iraq is now waiting for a final go-ahead from Turkey, but the two sides have yet to start talks on the resumption of exports via the pipeline and the port of Ceyhan.   

Earlier this week, sources with knowledge of the plans told Reuters that Iraq and Turkey were expected to start talks at technical level by early next week on resuming the northern oil exports from Iraq and Kurdistan via Ceyhan.

However, chances are low that the crude oil exports could be restarted soon, the sources added.

“This does not mean exports will immediately restart as this decision requires high-level political talks,” an official at Iraqi state-owned North Oil Company told Reuters.  

By Tsvetana Paraskova for Oilprice.com

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