Iraq has asked the Kurdistan Regional Government (KRG) to help move crude oil from the northern Kirkuk fields to Turkey’s Ceyhan port, as Baghdad seeks to offset major export losses caused by disruptions in the south, Reuters reported, citing two oil officials familiar with the matter.
According to the report Iraq’s oil ministry sent a letter to the KRG early last week requesting that at least 100,000 barrels per day of crude be pumped from the state-run Kirkuk oilfields and transported to Ceyhan through existing pipeline infrastructure.
The oil could be sent through the pipeline operated by the Kurdistan Pipeline Company, which carries crude from northern Iraq to a border connection with the Iraq–Turkey pipeline leading to the Mediterranean port of Ceyhan.
Shipments could increase gradually depending on available supply, and Baghdad would cover the transit fees for the oil transported through the Kurdish region, the officials told Reuters. The KRG has not yet responded to the request.
The Kirkuk–Ceyhan oil pipeline, also known as the Iraq–Turkey crude oil pipeline, runs about 970 kilometers (600 miles) from Iraq’s northern Kirkuk oilfields to the Turkish Mediterranean port of Ceyhan and has long been the country’s main northern crude export route.
The move is intended to reduce the financial impact of the sharp decline in Iraq’s southern oil exports, which have been disrupted by the war triggered by US-Israeli strikes on Iran on February 28 and Tehran’s retaliatory attacks on US assets in Gulf countries.
Oil production from Iraq’s main southern fields, where most of the country’s crude is normally produced and exported, has dropped by about 70 percent to roughly 1.3 million barrels per day from around 4.3 million barrels per day, Reuters reported earlier this month, citing sources.
Exports from the Gulf have been severely constrained because of the war, leaving Baghdad scrambling to find alternative routes for its oil.
Northern fields in Kirkuk are currently producing about 350,000 barrels per day, but all of that oil is being directed to domestic refineries in northern Iraq, including the country’s largest refinery in Baiji.
Under the proposed arrangement, the oil ministry would redirect crude from southern fields to the Baiji refinery to replace the Kirkuk oil that would instead be exported through the pipeline to Turkey, according to one oil ministry source cited by Reuters.
The drop in oil output and exports threatens to worsen Iraq’s already fragile fiscal situation, as government revenues depend overwhelmingly on crude sales.
