Shafaq News – Baghdad

Iraq is losing an estimated $11.16 million each day due to the halt in oil exports from the Kurdistan Region, the Eco Iraq economic observatory revealed on Saturday.

In a statement, the observatory said the Kurdistan Region was expected to export around 230,000 barrels of crude oil daily, in addition to allocating 50,000 barrels for local use. Based on its calculations, the cost of extraction and transportation stands at about $16 per barrel, while delivery fees to the Turkish port of Ceyhan are $1.5 per barrel.

After deducting these expenses, the observatory noted, the net profit from exports should reach the equivalent of 230,000 barrels per day, with an assumed price of $66 per barrel, resulting in $11.16 million in daily revenue.

“The halt means Iraq is losing approximately $334 million each month and more than $4 billion annually in potential earnings.”

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Oil exports from the Kurdistan Region have been suspended since March 2023, when an international arbitration court in Paris ruled that Turkiye must stop loading Kurdish crude without Baghdad’s approval, citing violations of a 1973 pipeline agreement. Since then, exports through the Iraq-Turkiye pipeline have been on hold, pending a new framework that would grant Iraq’s State Organization for Marketing of Oil (SOMO) exclusive authority over foreign sales.

Negotiations between the Iraqi and Kurdish governments have focused on how much oil should be allocated for domestic consumption in Kurdistan, the mechanism for paying international oil companies operating in the region, and the transfer of non-oil revenues to Baghdad. Earlier this year, the Iraqi parliament amended the federal budget law to set production and transport costs at $16 per barrel and require Kurdistan to deliver its crude to SOMO.

Read more: Iraq-Turkiye pipeline dispute: Billions in damages unresolved

In recent months, Baghdad and Erbil have reached partial understandings: the Kurdistan Regional Government (KRG) agreed to transfer non-oil revenues amounting to hundreds of billions of Iraqi dinars to the federal treasury, while Baghdad resumed paying the salaries of public employees in the Region. A further agreement foresees the export of Kurdish crude under SOMO’s supervision, with around 50,000 barrels per day allocated for local needs and the rest shipped abroad.

Despite these steps, exports have yet to resume as technical and contractual issues remain unresolved, particularly regarding arrears owed to international producers and coordination with Turkiye over pipeline operations.