Kurdistan Partially Honors Oil Supply Commitment To Federal Iraqi Govt

The semi-autonomous region of Kurdistan is partially honoring the recent deal with the federal government of Iraq to supply crude from the region to Iraqi, an unnamed source told Argus on Wednesday.  

The Kurdistan Regional Government (KRG) supplies 50,000 barrels per day (bpd) of crude oil to Iraq’s northern refineries, as part of the Iraq-Kurdistan deal under which the semi-autonomous region should deliver at least 400,000 bpd to the Iraqi storage tanks at the Ceyhan port in Turkey for sale to the international markets by Iraqi state oil marketing firm SOMO. If the crude cannot be exported from the Turkish port of Ceyhan on the Mediterranean – as is the case currently – it should be directed to Iraqi refineries, including those in northern Iraq, Argus notes.

The KRG has been handing over 50,000-60,000 bpd of oil to Baghdad since the middle of June as part of the budget deal under which the federal government of Iraq will be responsible for exporting Kurdistan’s crude oil. SOMO is now in charge of marketing Kurdistan’s crude, after the region had sold the oil independently for years.

“We have handed over 50,000-60,000 barrels of oil since mid-June,” to the federal government of Iraq, Omed Sabah, President of the Diwan of Council of Ministers, told local news outlet Kurdistan 24 in an interview published on Monday.

Despite the new budget deal, under which Kurdistan is entitled to a 12.67% share of the Iraqi budget, most of the oil from Kurdistan hasn’t been exported since the end of March this year.

Iraq and Kurdistan have not exported crude oil from Ceyhan since March 25, due to ongoing disputes about who is in charge of exports.  

Iraq, OPEC’s second-largest producer after Saudi Arabia, is currently exporting oil only via its southern oil export terminals. Around 450,000 bpd of exports from the northern fields and from Kurdistan continue to be shut in.  

By Charles Kennedy for Oilprice.com

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