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Baghdad Agrees To Ship Kirkuk Oil To Iran

Kirkuk

Tehran and Baghdad have reached an agreement on a plan to export oil from Kirkuk in northern Iraq to Iran, according to a new announcement by Iraqi Oil Minister Jabar al-Luiebi.

Iran is set to receive 30,000-60,000 barrels per day of oil under the agreement, though that amount could increase, the minister said. The crude will reach its final destination in the Kermanshah province aboard tankers until a completed pipeline can make the transfer more efficiently. There, a local refinery will process the oil.

The final version of the agreement has yet to be signed, but Luiebi added that the formality would be completed in the near future, once technical issues had been sorted out.

This announcement comes just over a month after the Kurdish referendum, which resulted in a near-unanimous vote for the Kurdistan Regional Government to secede from Iraq. Baghdad has not accepted the results of the vote, moving instead to deploy its military to secure control of the Kirkuk oilfields, which, though located in northern Iraq, do not lie in areas legally allotted to the KRG.

The Iraqi army’s offensive against Kurdistan also involved an Iran-trained militia, the Hashd al-Shaabi. Iran, like Turkey, strongly opposed any attempt at Kurdish independence, in line with Baghdad’s attitude to the issue. Both Iran and Turkey have significant Kurdish minorities.

Related: Kingdom Of Fear: Saudi Arabia On Lockdown

Until recently, all oil from the fields around Kirkuk was shipped to the Turkish port of Ceyhan via a pipeline owned and operated by the Kurdistan Regional Government. 

With the Kurdistan autonomous region heavily dependent on oil revenues, chances are the government will seek to come to a mutually beneficial agreement with the central government in Baghdad. Yesterday, the region’s Prime Minister, Nechirvan Barzani acknowledged the adverse effect that the Iraqi offensive has had on the region’s oil income, saying it had fallen to less than 50 percent of what it used to be before October 16, when the offensive was launched.

By Zainab Calcuttawala for Oilprice.com

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