Trump chooses Baghdad: Kurdistan oil export or sanctions like Iran
Reuters revealed on Friday the details of American pressure exerted by the administration of President Donald Trump on the Iraqi government in order to speed up the resumption of the export of Kurdistan Region’s oil through the Turkish Jeyhan line, or to face economic sanctions as is the case with Iran.
Reuters quoted eight sources in Baghdad, Washington and Erbil, who have direct knowledge of the issue, as saying that “increasing pressure from the new US administration was a major driver behind the Iraqi oil minister’s announcement last Monday that exports from the region will resume next week.”
A rapid resumption of exports from Iraq’s semi-autonomous Kurdistan region would help offset the potential decline in Iranian oil exports, which Washington has pledged to cut to zero as part of Trump’s “maximum pressure” campaign against Tehran.
The oil flow would mark the end of a nearly two-year conflict that has reduced the flows of more than 300,000 barrels per day of the region’s oil through Turkey to global markets.
Iran considers its neighbor and ally Iraq vital to keep its economy on its feet amid sanctions. But Baghdad, a partner of both the United States and Iran, is worried that it will fall into the shairds of Trump’s policy of pressuring Tehran, the sources said.
Trump wants Iraqi Prime Minister Mohammed Shia al-Sudani to cut economic and military ties with Iran. Last week, Reuters reported that the Central Bank of Iraq prevented five other private banks from accessing the dollar at the request of the United States. Treasury.
Iraq’s announcement on the resumption of exports was hasty and lacked details on how to address technical issues that need to be resolved before restarting flows, four of the eight sources as well.
Iran exerts significant military, political and economic influence in Iraq through its powerful Shiite militias and the political parties it supports in Baghdad. But the growing U.S. pressure comes at a time when Iran has been weakened by Israel’s attacks on its regional proxies.
With the closure of the pipeline transporting crude oil from Kurdistan to the Turkish port of Ceyhan since 2023, the smuggling of Kurdish oil to Iran by truck has flourished. Six of the eight sources said the United States was urging Baghdad to limit this flow.
An Iraqi oil official familiar with crude truck shipments crossing to Iran said: “Washington is pressuring Baghdad to ensure the export of crude oil from the region to world markets through Turkey instead of selling it cheaply to Iran.”
While the closure of the Turkish pipeline has led to a rise in Kurdish oil smuggling through Iran, a larger network that some experts believe generates at least $1 billion a year for Iran and its proxies has flourished in Iraq since Sudanese took office in 2022, according to Reuters last year.
In this regard, two US administration officials confirmed that the United States asked the Iraqi government to resume the region’s exports, one of whom said that this step would help alleviate the upward pressure on oil prices.
Asked about the administration’s pressure on Iraq to open Kurdistan Regional oil exports, a White House official said: “It is important for regional security not only to allow our Kurdish partners to export their oil, but also help keep the price of gas down.”
The resumption of the region’s oil exports would help offset some of the losses in global supply from the decline in Iranian exports, but will cover only a fraction of more than 2 million barrels per day of crude oil and fuel shipped by Iran. However, Iran has proven to be brilliant in the past at finding ways to circumvent US sanctions on its oil sales.
While Turkey stopped the pipeline in March 2023 after the International Chamber of Commerce ordered Ankara to pay $1.5 billion to Baghdad in compensation for unauthorized exports between 2014 and 2018.
The sources told Reuters that there are still unresolved problems with payment, pricing and maintenance. Two-day talks in the city of Erbil this week failed to reach an agreement, sources said.
A source familiar with this matter said that the federal government wanted to restart exports without making commitments to the Kurdistan Regional Government on payments and without clarifying the payment mechanism.
Restarting could also cause problems at OPEC+, the Organization of the Petroleum Exporting Countries, as well as Russia and other allies, as Iraq is under pressure to comply with its pledge to cut production. Additional supplies from the Kurdistan Region of Iraq could be placed above OPEC+’s supply target.
An Iraqi official concluded by saying: “It is possible for Iraq to restart the pipeline and remain in compliance with the supply policy of OPEC+.”
https://www.shafaq.com/ar/سیاسة/ترامب-يخي-ر-بغداد-تصدير-نفط-كوردستان-و-عقوبات-مثل-يران
