Iraq Awaits Turkey’s Go-Ahead To Resume Kurdistan Oil Exports

Iraq is waiting for a final go-ahead from Turkey before resuming oil exports from the semi-autonomous Iraqi region of Kurdistan via a pipeline to the Turkish Mediterranean port of Ceyhan, Iraqi Oil Minister Hayan Abdel-Ghani told Reuters on Tuesday.  

Kurdistan’s oil exports have been halted for two months now and it will probably take weeks, not days, for oil flows to Ceyhan and to the international markets to resume, according to an Iraqi oil official.

Turkish pipeline operator BOTAS has yet to receive instruction from Turkish authorities to resume oil flows from Kurdistan, the official told Reuters on Monday.

“We’re talking about weeks, not days, as an expected time frame to resume exports. This issue is more political now than technical,” the source told Reuters.

Iraqi oil minister Abdel-Ghani said on Tuesday that Turkey told Iraq that a technical team was evaluating whether the pipeline was damaged as a result of the February earthquake in Turkey and Syria.

Kurdistan’s crude oil exports – around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets – 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.

A few days before the halt of exports in March, the International Chamber of Commerce had ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq argued that Turkey shouldn’t allow Kurdish oil exports via the Iraq-Turkey pipeline and Ceyhan without approval from the federal government of Iraq. 

Now that an agreement between Iraq and Kurdistan is in place for the resumption of exports, Iraq is awaiting a response from Turkey. Pipeline operators have not yet received instructions to resume flows and most of Kurdistan’s large oilfields remain shut in.  

By Tsvetana Paraskova for Oilprice.com

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