Kurdistan has lost some $28 billion from a dispute between the government of the semi-autonomous region, the central Iraqi government, and Turkey that has been running for over two years now.
“From March 25, 2023, until now, Iraq and the Kurdistan Region have suffered losses of more than 28bn dollars due to the halt in oil exports,” Safin Dizayee, who is the head of foreign relations at the Kurdistan Regional Government, told media this week.
Oil exports from Kurdistan have now been halted for two and a half years, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports. Despite some breakthroughs in negotiations in recent months, the disagreements have continued. Before the halt to exports, oil supply from Kurdistan averaged more than 400,000 barrels per day.
The dispute showed some signs of progress earlier this year, with Baghdad and Ankara reaching an agreement on some major points. A final agreement between the Kurdistan government and the central Iraqi government in Baghdad, however, is yet to be achieved. Meanwhile, the situation is causing security concerns for the Kurdish government, Dizayee also said.
In July, drone attacks on oil fields operated by U.S. companies shut in some 200,000 barrels daily in production. No group claimed responsibility, but the incidents marked the most serious disruption in the region since April.
The dispute between Erbil and Baghdad concerns the link between revenues from oil exports from the semi-autonomous region and public servant salaries.
Prior to the March 2023 halt, the Kurdistan Region was exporting approximately 400,000 barrels per day of crude through the Iraq-Turkey pipeline to Ceyhan. These volumes accounted for over 10 percent of Iraq’s total oil exports and were a critical revenue stream for the Kurdistan Regional Government.
By Charles Kennedy for Oilprice.com
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