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Kurdistan’s Oil Exports Could Be Shut In For Another Week

Kurdistan’s oil exports could be suspended for several more days as officials from Kurdistan are set to return to Baghdad next week for a new round of talks on the resumption of crude exports from Kurdistan via a pipeline to the Turkish Mediterranean port of Ceyhan.

The Kurdistan Regional Government hopes that talks next week could result in the resumption of Kurdistan’s oil exports, commodity analyst Giovanni Staunovo says, quoting the head of foreign media affairs for the Kurdish government.  

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 late last week by the federal government of Iraq.

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 Ceyhan without approval from the federal government of Iraq.

Talks between officials from Kurdistan and from the Iraq federal government have failed in recent days.

Next week could see a breakthrough in talks, but oil companies operating in the semi-autonomous region of Kurdistan have already started to shut down oil fields as storage capacity is limited while they had been instructed to temporarily cease deliveries to the Iraq-Turkey Pipeline destined for the port of Ceyhan.

The company pumping a quarter of Kurdistan’s crude oil exports, Norway-based DNO ASA, said on Wednesday that it had started an orderly shutdown of its oil fields following the suspension of oil exports.

“It is unfortunate it has come to this given the likely impact of a continuing supply disruption on oil prices and at a fragile time in global financial markets,” DNO’s Executive Chairman Bijan Mossavar-Rahmani said.

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Another operator in Kurdistan, London-listed Gulf Keystone Petroleum, said on Monday that its facilities “have storage capacity that allow continued production at a curtailed rate over the coming days after which the Company will suspend production.”

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on March 30 2023 said:
    Whatever crude oil produced in Iraq whether in Iraqi Kurdistan or any part of Iraq is the property of the Iraqi people according to Iraq’s Federal Constitution. Moreover, Iraq’s oil marketing organization ‘SOMO is the only organization in Iraq responsible for marketing Iraq’s oil.

    Therefore, the Kurdistan Regional Government (KRG) can’t export any Iraqi oil unless authorized by the Federal government in Baghdad. Moreover, Turkey shouldn’t permit Iraqi oil shipments to be piped via the Iraq-Turkish pipeline (ITP) to the Turkish Mediterranean port of Ceyhan without Iraq’s approval. This was confirmed last week by the by International Chamber of Commerce which ruled in favour of Iraq against Turkey in a dispute over crude flows from Iraqi Kurdistan.

    The KRG will get an agreed share of Iraq’s oil revenue for shipments going through the ITP only with the Federal government approval according to the Federal Constitution.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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