Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

Iraq's KRG Looses Over $1.5 Billion USD Over OIL Conflict with Turkey May 2023


The KRG has lost over $1.5 billion in revenue due to the stoppage of oil flow through the Turkish Pipeline at the Ceyhan  Port.  The KRG could default on certain debts if a conclusion is not reached soon.  This article explains why and how this happened.

Turkey brought Iraq’s Oil Exports of 450,000 barrels per day to a halt through the Iraq-Turkey pipeline on the 25th of March due to a ruling by the International Chamber of Commerce. 

Baghdad is still awaiting Turkey's final decision concerning the resumption of northern oil shipments from Kurdistan to the Turkish port of Ceyhan, Iraq’s oil minister Hayan Abdel-Ghani stated this Tuesday. Ankara has informed Iraq that a technical squad would evaluate if the pipeline had been damaged due to the earthquake in February. “We are on the point of sending a group of experts to assess the pipeline to make sure that it has no further issues or requires more thorough tests”, Abdel-Ghani added.

Baghdad requested that Turkey resume flows and loading operations at Ceyhan this month to help offset a revenue shortfall in the Kurdistan region after production fell as a result of Turkey’s shutdown. The 60-day stoppage, which Reuters estimates has cost the KRG more than $1.5 billion and could lead it to default on some debts, comes as the KRG struggles with increasing financial pressure from falling oil prices and high support costs for refugees fleeing conflict in Syria and Iraq. 

Turkish elections were held on May 14, but neither of the two main candidates exceeded 50% of the votes required to avoid a second round on May 28. Ankara is currently negotiating with all parties involved to find an amicable solution to the issue.

The flow of oil exports to the Ceyhan port in Turkiye has yet to resume four months after Ankara stopped exporting via the Iraq-Turkiye pipeline on March 25.

Oil fields that had stayed open are now shut down or operating with reduced output.

Around two weeks ago, SOMO – Iraq's State Organisation for Marketing of Oil – notified the Turkish state energy company Petroleum Pipeline Corporation that export and loading operations will be resumed at some point. Iraq and KRG had agreed to restart Kurdish oil exports through Turkiye last month, but Turkiye was unwilling to do so until both sides could agree on an arbitration decision. Oil sales make up more than 90 percent of Iraq's revenues, and any delay in resuming exports hits the country hard.

At the same time, French multinational TotalEnergies finally came to an agreement with Iraq's government to begin a $27bn energy project initially proposed back in 2021. It will involve four separate oil, gas, and renewable projects spread out across southern Iraq over a 25-year period funded by an initial investment of $10bn. 

Despite being initially planned out, though, it was postponed due to disputes between Iraqi politicians over its terms.

This post first appeared on Iraqi Dinar US Rates News, please read the originial post: here

Share the post

Iraq's KRG Looses Over $1.5 Billion USD Over OIL Conflict with Turkey May 2023


Subscribe to Iraqi Dinar Us Rates News

Get updates delivered right to your inbox!

Thank you for your subscription