The flow of crude oil from Iraq to Turkey will not resume prior to October, sources have revealed.
Iraq's oil flows to Turkey-which have been suspended since March 25-are unlikely to resume until Turkey's President Tayyip Erdogan visits Baghdad in October. The trip was originally planned to take place in August but was pushed back.
The International Chamber of Commerce (ICC) suspended oil flows in March, ordering Turkey to pay the Iraqi government $1.5 billion in compensation for what it determined were unauthorized oil exports by the Kurdistan Regional Government (KRG) between 2014 and 2018 via the Iraq-Turkey pipeline and the port of Ceyhan.
The two parties have been discussing a restart of the oil flows now for months but have been plagued with repeated delays-some due to technical problems and others due to political ones. The KRG has missed out on billions in oil revenues since oil flows were suspended.
Even after an agreement was reached between Iraq and Kurdistan over the resumption of exports, a deal between Turkey and Baghadad is still not complete. As part of the Iraqi-Kurdistan deal, the Kurdistan Regional Government began handing over 50,000-60,000 barrels per day (bpd) of oil to Baghdad since the middle of June as part of the budget deal under which the federal government of Iraq through its state marketing company SOMO, will now be responsible for exporting Kurdistan's crude oil.
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. Iraq, OPEC's second-largest producer after Saudi Arabia, is currently exporting oil only via its southern oil export terminals.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More