Economy

OPEC urges Iraq to resume Kurdistan Region's oil exports amid economic concerns

A source within the Federal Oil Ministry disclosed to Iraqi media that OPEC has specifically called upon Federal Oil Minister Hayyan Abdul Ghani to greenlight the export of oil from the Kurdistan Region through the Turkish port.

Kurdistan 24 2024/04/22 14:20

The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC's headquarters in Vienna, Austria, Thursday, March 3, 2022. (Photo: AP)

Iraq Oil Exports Resumption of KRGs Oil Exports OPEC Iraq

ERBIL (Kurdistan24) - The Organization of Petroleum Exporting Countries (OPEC) has made a formal appeal to the Iraqi Oil Minister, urging the resumption of oil exports from the Kurdistan Region, a move aimed at alleviating economic strains.

According to the source, OPEC has recommended permitting the Kurdistan Regional Government (KRG) to export 200,000 barrels of oil per day via the Turkish port.

In response to OPEC's request, Hayyan Abdul Ghani has forwarded the appeal to Iraqi Prime Minister Mohammed Shia al-Sudani, awaiting a decisive response.

The Iraq-Turkey oil pipeline, crucial for oil exports, has remained inactive since March 25, 2023. Despite the pipeline's capacity to export 1.4 million barrels of oil per day, previous exports reached only 450,000 barrels per day before the suspension.

While the Turkish Energy Ministry has confirmed the pipeline's operational readiness since October 4, the Iraqi government has hesitated to resume oil exports from the Kurdistan Region through the pipeline, citing unresolved issues.

The prolonged halt in oil exports has inflicted substantial economic losses on Iraq, the Kurdistan Region, and international oil companies. Iraq has incurred a staggering $14.5 billion revenue loss during the 14-month suspension period, facing daily fines of $800,000 for non-compliance with export agreements.

Furthermore, investments worth over $400 million have been frozen, leading to a significant decline in annual revenues for oil companies and a surge in unemployment rates.

The suspension of oil exports has not only triggered a rise in global oil prices but has also tarnished Iraq's reputation, dampening investor confidence and reducing trade demand within the country, as noted by energy experts.