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Iraq will begin exporting next week 60,000 bpd of oil from the fields in Kirkuk to an Iranian refinery across the border via tanker trucks, in exchange for refined oil for southern Iraq, the acting director general of Iraq’s state oil marketing company SOMO, Alaa al-Yasiri, said on Monday.
Until recently, 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. However, after the September independence referendum in Kurdistan, Iraqi troops took control of disputed Kirkuk, which falls outside of the autonomous region’s boundaries, and the surrounding fields.
Last month, Iraq and Iran agreed on an oil swap deal that will run for one year and is subject to renegotiation, Iraq’s Oil Minister Jabbar al Luiebi said. The deal envisages the swap of up to 60,000 bpd of crude oil, with the Iraqi oil coming from the Kirkuk field in northern Iraq.
In the future, Iraq and Iran plan to build a new pipeline from the Kirkuk field to the border with Iran, to replace the tanker trucks. This suggests that although the initial term of the deal is just one year, there are plans to make it a longer-term deal.
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After the Iraqi offense against Kurdistan following the independence referendum that Baghdad rejected, the federal government took over control of the Kirkuk field, but no oil flowed from it.
Now Baghdad will transport between 30,000 and 60,000 bpd of Kirkuk crude by tanker trucks to the border with Iran at Kermanshah. In exchange, Iran will supply the same amount of similar-grade crude to Iraq’s south.
SOMO’s crude oil exports have been running at an average rate of 3.5 million bpd so far this month, al-Yasiri told reporters yesterday. The January exports could top the record exports of 3.535 million bpd from December, Reuters quoted al-Yasiri as saying. The exports of Kirkuk crude oil to Iran will begin next week, the official said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.