Kurdistan Region’s one-year halt in oil exports costs billions, oil firms report

SULAIMANI, Kurdistan Region – As the Kurdistan Region’s oil exports remain halted for one year, the Association of the Petroleum Industry of Kurdistan (APIKUR) warns that this pause has cost billions of dollars for Iraqis and international oil companies.

After an International Arbitration Court ruling favored Iraq over Turkey, oil exports through Turkey’s Ceyhan port were halted in the Kurdistan Region on March 25, 2023. The ruling stated that Turkey had transported oil from the Region without the consent of the Iraqi government, thus violating a prior agreement with Iraq.

According to a statement from APIKUR, the disruptions have resulted in an estimated revenue loss for Iraq exceeding $11 billion, roughly equating to $1 billion per month. Additionally, APIKUR members have paused over $400 million in annual investments.

Although the annual revenues of international oil firms have decreased by almost 60% due to the shift from exporting to local sales, the halt of oil exports is exerting pressure on a delicately balanced global energy market, which is already grappling with Russian sanctions and shipping disruptions in the Red Sea, APIKUR states.

Furthermore, the absence of oil revenue and budget transfers from the Government of Iraq to the Kurdistan Regional Government (KRG) has resulted in significant delays in disbursing salaries to civil servants, including teachers and healthcare workers as they have been paid only their January salary in the last six months.

Despite the efforts made by the Iraqi government and the Kurdistan Regional Government (KRG), up to now, neither APIKUR nor its members have received any proposal from either the federal government or the KRG that would facilitate the resumption of exports. APIKUR warns.

“APIKUR remains focused on working with all stakeholders to restore full oil production and exports through the Iraq-Türkiye Pipeline,” said Myles B. Caggins III, spokesman for APIKUR.

APIKUR asserts that Iraq has failed to take the necessary steps to reopen the Iraq-Turkey pipeline and facilitate oil exports from the Kurdistan Region of Iraq, despite Turkey’s announcement in October 2023 that the pipeline is operational and prepared for oil export.

It also states that even though they’ve had meetings and talked positively about it in the news, there has been no substantial progress towards reopening the pipeline.

Photo credit: APIKUR

More Articles

Back to top button