White House urges Turkiye, Iraq to resume Kurdish oil exports

The US is urging Ankara and Baghdad to allow the Kurdistan Regional Government (KRG) to resume oil exports through Turkiye, a US State Department spokesperson said on 28 March.

The International Chamber of Commerce (ICC) arbitration court ruled on 23 March that Turkiye had violated a 1973 pipeline agreement between Iraq and Turkiye that requires the Turkish government to adhere to directions issued by Iraq regarding the export of oil from the country, including the KRG.

Under the ICC court ruling, the Iraqi government’s State Oil Marketing Organization (SOMO) is the only entity authorized to manage the export of oil via pipeline to Turkiye’s Ceyhan port.

Following the ICC decision last week, Turkiye informed Iraq that Ankara would no longer allow KRG crude to be loaded onto ships at Ceyhan port without permission from Baghdad.

This blocks the export of some 450,000 barrels of oil per day.

Kurdish officials heavily rely on oil revenues to fund their budget, meaning an extended halt to exports could significantly damage the KRG economy.

Kurdish officials have had difficulty paying salaries of civil servants for years, even though Kurdistan Democratic Party (KDP) leader Masoud Barzani’s family is alleged to have a personal fortune of some $42 billion held in Turkish banks.

A halt in exports may also force international oil companies in the region to slow or halt production, as oil storage capacity within the KRG is limited.

US State Department spokesman Vedant Patel told Rudaw that Washington has “urged the governments of Turkey and Iraq to resume the flow of oil through the Iraq-Turkey pipeline, and disruptions to global energy supply would not serve anyone’s interest.”

“We also understand that the Kurdistan Regional Government is in discussion with the government of Iraq to find a mutual, acceptable path forward on related budget and hydrocarbon issues as was discussed during the February US-Iraq Higher Coordinating Committee in Washington,” he added.

In 2014, the KRG’s Peshmerga forces took advantage of the chaos following ISIS’ invasion of Mosul and took control of the oil-rich city of Kirkuk by force. Despite objections from Baghdad, Kurdish officials quickly began exporting crude via pipeline to Turkey’s Ceyhan port for further sale to Israel while also calling for Iraqi Prime Minister Nuri al-Maliki to be replaced, Forbes reported.

As Michael Gordon of the New York Times detailed, US officials also pushed for Al-Maliki to be replaced at that time and refused to provide significant military help to protect Baghdad from falling to ISIS unless Maliki agreed to step down following the recent parliamentary elections.