It can revive the Iraqi budget.. $14 billion in “losses” due to the halt of Kurdistan’s oil exports
Oil consultant and expert, Govind Shirwani, revealed today, Monday (August 19, 2024), that the losses from stopping the export of oil from the Kurdistan Region exceeded $14 billion after a year and a half of cessation.
In an interview with Baghdad Today, Sherwani said, “The losses of not exporting the Kurdistan Region’s oil through the Turkish port of Ceyhan exceeded 14 billion dollars, and this is a very large number, and it could have revived the Iraqi budget, which suffers from a lack of liquidity.”
He added, "There are meetings between the Iraqi Ministry of Oil, the Ministry of Natural Resources in the region, and some representatives of foreign companies, but so far there have been no positive indications indicating the resumption of oil exports, but the participation of the three parties in itself is good progress."
Turkey had earlier halted Iraq's exports of 450,000 barrels per day via the oil pipeline that runs from the Kurdistan Region in northern Iraq to the Turkish port of Ceyhan on March 25, 2023.
Turkey's decision to suspend exports came after an arbitration ruling by the International Chamber of Commerce ordered Turkey to pay Baghdad $1.5 billion in compensation for damages caused by the Kurdistan Regional Government exporting oil without permission from the government in Baghdad between 2014 and 2018.
Attempts to restart the pipeline have been delayed by Turkey's presidential election last month and discussions between the Iraqi government's state oil marketing company SOMO and the Kurdistan Regional Government over an export deal that has now been reached.
Among the issues to be resolved is whether Turkey will seek to negotiate the size of the compensation ordered by the International Chamber of Commerce, sources told Reuters earlier.
It also wants outstanding issues in other open arbitration cases to be permanently resolved before it agrees to resume flows, the sources said.
The Kurdistan region is suffering from a cash shortage due to the pipeline shutdown, and Iraqi politicians and Kurdish lawmakers said the region had no choice but to approve the budget, from which it would receive 12.67 percent of the total 198.9 trillion dinars ($153 billion).
The loss in revenue for the Kurdistan Regional Government due to the 80-day oil shutdown amounts to more than $2 billion, according to Reuters calculations based on exports of 375,000 barrels per day, in addition to the historical discount the KRG offers relative to the price of Brent crude.
The pipeline also exported about 75,000 barrels per day of federal crude link
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