[ad_1]
© Reuters.
By Natalie Grover
LONDON (Reuters) – A 12 months after the closure of the Iraq-Turkey oil pipeline, the conduit that when dealt with about 0.5% of world oil provide continues to be caught in limbo as authorized and monetary hurdles impede the resumption of flows, three sources informed Reuters.
About 450,000 barrels per day of crude as soon as flowed by means of Iraq’s northern oil export route through Turkey, and its closure has led to the lack of roughly $11 billion to $12 billion for Iraq, the Affiliation of the Petroleum Business of Kurdistan (APIKUR) estimates.
A restart isn’t being mentioned for the time being, one of many sources with data of the matter informed Reuters.
Ankara halted flows on March 25, 2023, after an arbitration ruling discovered it had violated provisions of a 1973 treaty by facilitating oil exports from the semi-autonomous area of Kurdistan with out the consent of the Iraqi federal authorities in Baghdad.
The courtroom ordered Ankara to pay Baghdad $1.5 billion in damages for unauthorised exports between 2014 and 2018. A second ongoing arbitration case covers the interval from 2018 onwards. The international locations stay embroiled in a protracted authorized tussle, two sources accustomed to litigation mentioned.
In the meantime, Iraq owes Turkey minimal funds so long as the pipeline is technically operational – estimated by consultancy Wooden Mackenzie at round $25 million monthly – as a part of the treaty, in idea offering an incentive to restart flows.
However with Iraq deepening oil export cuts as a part of OPEC+’s broader mission to help oil costs, a resumption of northern flows isn’t on the agenda, two sources informed Reuters.
POLITICAL LANDSCAPE
Geopolitical elements are additionally a stumbling block. The Iraqi authorities’s strained relations with the Kurds, a function of Iraq’s political panorama since Saddam Hussein was toppled within the 2003 U.S.-led invasion, have lately soured additional.
The US, which might profit from the pipeline restart reducing oil costs, has additionally made a handful of makes an attempt to assist dealer a deal, mentioned Michael Knights, an Iraq skilled on the Washington Institute think-tank.
However with battle raging in Ukraine and Gaza, the U.S. authorities is unfold skinny, he mentioned. “They’ve tried to repair this downside about 5 or 6 instances. And so they’re uninterested in it.”
The U.S. State Division didn’t reply to a request for remark.
Additionally key to any restart deal are the worldwide oil corporations working within the Kurdistan area, who had been pressured to halt exports because of the pipeline closure. As a substitute, they’ll solely promote oil domestically in Kurdistan at a big low cost.
With greater than $1 billion collectively owed in overdue funds for oil delivered between October 2022 and March 2023, in response to APIKUR, the group continues to push for compensation consistent with their contracts.
The businesses have additionally collectively misplaced greater than $1.5 billion in direct income because the closure, the group mentioned.
Regardless of a number of conferences, neither APIKUR nor its members have obtained any formal proposals or agreements from Iraqi or Kurdish officers that might result in a resumption of exports, an APIKUR spokesperson mentioned.
[ad_2]
Source link
