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Iraq’s semi-autonomous region of Kurdistan has been assured by the buyers of its crude oil that the oil was not headed to the U.S., Kurdistan’s Minister of Natural Resources Ashti Hawrami told Reuters on Thursday, just days after the central Iraqi government said it would challenge the legal validity of Kurdish oil exports to the US in American courts in a renewed tension between Baghdad and Erbil over crude oil exports.
“I have made inquiries with our crude buyers and was assured that no cargo with crude is going to the United States,” Hawrami told Reuters, as the Kurds are trying to avoid tensions with the central government.
“Oil could be stored or travelling to other places, but not the U.S.,” Hawrami told Reuters.
Earlier this week, reports suggested that Kurdish oil was headed for the United States, further buttressing the semiautonomous region’s economic independence as Erbil prepares for a referendum on political independence later this year. An estimated 650,000 barrels of oil, mostly extracted from the Kirkuk field located in Kurdistan, departed the Mediterranean Sea on June 20th, according to Bloomberg data. The oil tanker’s route indicated a dash towards the American East coast, after a three-year hiatus—caused by a dispute with Baghdad over Washington’s true loyalties—had ended the transatlantic shipments.
Just one day after the reports emerged, the central government in Baghdad declared its readiness to challenge the legal validity of Kurdish oil exports in American courts.
Now, Kurdistan is trying to avoid disputes with Baghdad, and Hawrami told Reuters that the two parties were holding talks on oil output and exports, refining, and power generation.
“We don’t have any intention of upsetting Baghdad. Our policy is to discuss and solve problems and not to create new obstacles,” the Kurdish minister said.
Kurdistan sells its oil to markets in Asia and Europe through trading houses, or directly to Russian oil giant Rosneft, with which the Kurdistan Regional Government (KRG) signed agreements earlier this month to boost cooperation in the oil and gas sector. The deals will strengthen the existing relationship between the two sides, which started in February 2017 when Rosneft began purchasing KRG’s crude oil for its international refineries, the ministry of natural resources 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.