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Iraq Asks U.S. Court To Enforce Ruling Against Turkey Over Oil Exports

Iraq is asking a U.S. federal court to enforce a ruling against Turkey over crude oil exports Turkey received from the Kurdistan Region of Iraq.

The exports from the semi-autonomous Kurdistan region of Iraq into Turkey still have not resumed, leaving multiple fields in the KRG region shut in. Turkey had stopped the flow of pipeline oil from that area—affecting about 450,000 bpd—after Iraq won an arbitration case against Turkey.

Iraq has accused Turkey of violating a decades-old pipeline agreement by importing oil from the semi-autonomous region of Iraq without Baghdad’s consent.

Most of Kurdistan’s oilfields remain shut in, with its pipeline exports halted, even though Kurdistan and Iraw reached an agreement to resume the exports via the Iraq-Turkey pipeline and the port of Ceyhan.

Iraq was awarded damages in the case last month under an ICC arbitration ruling. Sources have said that under that ruling, Turkey was ordered to be around $1.5 billion before interest for oil that shipped without Baghdad’s permission between 2014 and 2018.  Turkey has alleged that Iraq had also been ordered to pay in the dispute.

That ruling saw Turkey halt the flow of oil. While Iraq and Turkey were said to reach an agreement on resuming flows shortly thereafter, flows have yet to resume.

Now, with flows still stopped, Iraq is asking a U.S. federal court for help in enforcing the arbitration ruling.

Iraq’s government in Baghdad has long-argued that the Kurdistan region does not have control over its vast oil riches, including the authority to sell oil to the market without the approval and participation of the official oil marketing company of the Iraqi government, SOMO.

The deal that Iraq and Turkey have agreed to—if only temporary—would see the Kurdistan region sell its oil through SOMO.

By Julianne Geiger for Oilprice.com

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