Politics, Geopolitics & Conflict
The Iraq Update
The Kurds are once again going it on their own, selling oil unilaterally, bypassing the Iraqi central government of Baghdad, which cannot meet the financial commitments laid out in a deal that had temporarily resolved the oil dispute. Now, supermajor oil traders such as Vitol and Trafigura are locking in billions of dollars in Kurdish crude oil and shipments of this oil are becoming increasingly regular. Israel has been getting more than one-third of the Iraqi Kurds’ crude exports between May and August. From the Israeli side, this means it has been meeting up to three-quarters of its oil needs with Iraqi Kurd crude.
In total, since early May to 11 August, Israel has imported more than 19 million barrels of Kurdish crude. Iraqi crude is also going to refineries in Italy and France, among other destinations. Since May, the Kurds have sold nearly 40 million barrels of oil to traders through Turkey’s port of Ceyhan. Since May, we’re looking at about 450,000 barrels per day in sales; however, pipeline sabotage temporarily sabotaged that. There is not a lot Baghdad can do about it right now; it’s barely managing to contain the advances of the Islamic State. So, we’re not going to see any lawsuits against traders in Iraqi Kurd oil for the time being.
Certainly, Iraq’s key oil province—Basra—is eyeing these developments with interest. Basra is hoping to win…