It has now been just over a year since the Federal Government of Iraq imposed an embargo on oil exports from the country’s semi-autonomous region of Kurdistan.
Destroying all financial independence for the region, which is reliant on ongoing independent oil supplies, is one of the tools Baghdad has to erode Erbil’s autonomy.
The latest tactic of blaming international oil companies for the embargo still being in place is just another element.
The Kurdistan Regional Government (KRG) has lost $2 billion from oil revenues due to the nearly three-month-long suspension of Kurdish crude oil exports via Turkey, according to estimates by Reuters.
Iraq, OPEC’s second-largest oil producer, exported on average 3.3 million barrels per day (bpd) of oil in May, flat compared to April, according to the Iraqi oil ministry.
An oil dispute between the Iraqi government and the semi-autonomous Kurdistan region that also involves Turkey has escalated this week, pushing oil prices higher.
Oil prices rose by 2% early on Monday, with the U.S. benchmark up above $70 a barrel again, driven up by a halt to Kurdistan’s 400,000-bpd of crude exports and signs of easing concerns about the global banking sector.
The recent signing by Iraq’s federal government in Baghdad of three long-term oil and gas sector contracts with the UAE’s Crescent Petroleum – a company also heavily involved in the same sectors of Iraq’s semi-autonomous region of Kurdistan – may indicate that the ban on international oil companies (IOCs) trying to operate in both regions has now been relaxed by Baghdad.