Kurdistan's crude oil exports from the Turkish port of Ceyhan continue to be shut in for a fourth day after the semi-autonomous region in northern Iraq and the federal government in Baghdad failed to reach an agreement during the weekend on the resumption of crude flows.
Officials from the federal Iraqi government and the Kurdistan Regional Government met on Sunday in Baghdad, but no breakthrough in talks has been achieved, sources with knowledge of the matter told Bloomberg on Monday.
If the crude oil exports, at around 350,000 barrels per day (bpd) to 400,000 bpd, do not resume soon, oil prices could go higher amid lower global supply.
At the end of last week, the International Chamber of Commerce ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq had argued that Turkey shouldn't allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq.
After the ruling on Thursday, Turkey told Iraq it would respect the ruling, while Baghdad halted the exports from Kurdistan.
Norway-based DNO ASA, one of the major producers in Kurdistan, said on Monday that it had been instructed by the Kurdistan Regional Government to temporarily cease oil deliveries to the Iraq-Turkey pipeline for export following an arbitration ruling in favor of Iraq against Turkey and its state-owned pipeline operator BOTAS for transporting Kurdish oil without prior approval from Baghdad.
On Saturday, DNO began diverting oil production from its operated Kurdistan fields to storage tanks, which can accommodate several days' production from the Tawke and Peshkabir fields, the company added.
The investment climate in Kurdistan is currently not conducive to major oil industry investments-despite Kurdistan officials' claims to the contrary-amid a bitter dispute between the KRG and the federal government of Iraq over who has the right to control the oil resources and revenues in the semi-autonomous region.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More