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Turkey and Iraq on Monday discussed technicalities on the resumption of crude oil exports from Iraq’s northern oilfields and from the semi-autonomous region of Kurdistan, but political-level agreements will also be needed to unblock around 450,000 barrels per day (bpd) of oil flows.
On Monday, a technical delegation from Turkey visited Baghdad to discuss the restart of oil flows through an Iraqi-Turkey pipeline to the Turkish Mediterranean port of Ceyhan and then on tankers to the international markets, anonymous oil officials told Reuters.
“A decision to resume flows will not happen today and more meetings are expected,” one of the sources said.
Another source commented for Reuters that the issues blocking the exports were more of political than technical nature.
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 due to a dispute over who should authorize the Kurdish exports.
Kurdistan’s crude oil exports were halted on March 25 by the federal government of Iraq. The suspension of oil flows out of northern Iraq and Kurdistan via Ceyhan forced companies to either curtail or suspend production because of limited capacity at storage tanks.
Iraq is now waiting for a final go-ahead from Turkey, but the two sides have yet to reach an agreement on the resumption of exports via the pipeline and the port of Ceyhan.
Meanwhile, the Kurdistan Regional Government (KRG) has lost $2 billion from oil revenues due to the nearly three-month-long suspension of Kurdish crude oil exports via Turkey, according to estimates by Reuters.
Sources with knowledge of the plans told Reuters last week that Iraq and Turkey were expected to start talks at technical level by early this week on resuming the oil exports.
However, chances are low that the crude oil exports could be restarted soon, the sources added.
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.