ERBIL (Kurdistan 24) – A Taiwanese refining company says it has entered into a new fixed-term agreement with Iraq to buy light crude from the southern province of Basra in 2019.
Despite a US sanctions waiver to purchase crude from Iran, Taiwan’s Formosa Petrochemicals said on Thursday that a “lack of payment mechanism” has prevented it from buying Tehran’s oil.
Spokesperson KY Lin told Reuters that Iraqi supplies would replace Formosa’s immediate purchases of crude from Iran.
“There is no payment mechanism, so we will suspend Iranian oil loadings for the time being,” Lin stated. “So, the Iraqi contract is to replace some of the Iranian volume.”
Iraq’s Oil Ministry on Tuesday said they had allocated the country’s oil sales for 2019 with 67 percent of exports going to Asian markets. It was not clear if this figure included the then-unpublicized Taiwanese deal or not.
The ministry mentioned that 20 percent of its oil exports in the future would go to Europe and 13 percent to North and South America.
Thamer Ghadban, the Iraqi Minister of Oil, urged a “balanced policy” when dealing with the global oil market, and stated that the country’s 2019 sales were aimed at maintaining stability.
Iraq’s 2019 oil sales will also include the shipments of Kirkuk oilfields which contain billions of barrels of oil reserves, the ministry said in a statement.
The Federal Government of Iraq recently resumed the export of Kirkuk oil to Turkey’s Ceyhan port through the Kurdistan Region’s pipeline which had been halted for over a year.
For now, the resumption is about 50,000 – 100,000 oil barrels per day, which is expected to increase and bring more revenue to Kurdistan and Iraq in general.
Editing by John J. Catherine