The US is pushing to resume Kurdistan Region oil exports in discussions with Iraqi PM

Peregraf

A member of the Iraqi delegation in New York announced that the United States is pushing for the revival of oil exports from the Kurdistan Region.

The re-export of oil from the Kurdistan Region to international markets is a key topic in the talks between Iraqi delegations, led by Prime Minister Mohammed Shia al-Sudani, and US Secretary of State Anthony Blinken in New York. The United States is advocating for the removal of barriers to oil exports and aims to see these exports resume by the end of the year.

This meeting occurred on September 23, 2024. Dilan Ghafoor, head of the Foreign Relations Committee of the Iraqi Parliament, who was part of the discussions, told Peregraf that the US is eager to reinstate oil exports from the Kurdistan Region. "Blinken stressed the importance of resolving the issues that are obstructing oil exports and ensuring that they resume by the end of the year," Ghafoor reported.

On the other hand, the Iraqi Prime Minister expressed Iraq's desire to restart oil exports while acknowledging the challenges involved. "The prime minister pointed out two main issues: first, oil companies are seeking repayment of their outstanding debts owed by the Kurdistan Region, which Iraq cannot meet. Second, there is a need to renegotiate the oil contracts. While the Kurdistan Regional Government is amenable to this, the companies are resistant," Ghafoor revealed.

According to a high-ranking US State Department official, Kurdistan oil is being illegally taken out through a covert means, causing harm to budget of both Erbil and Baghdad governments.

Geoffrey Pyatt, the Assistant Secretary for Energy Resources at the US State Department, who attended the meeting with the Iraqi delegations, recently highlighted concerns about oil smuggling from the Kurdistan Region during an interview with Rudaw TV. He emphasized that "the current situation, where oil is being smuggled out, primarily benefits smugglers and Iranians, rather than Erbil or Baghdad".  Pyatt claimed that "All of that oil is being directed somewhere. The majority of it is being smuggled. It moves by truck, which puts a significant toll on the roads in Kurdistan. It exits through the rear exit in a manner that does not help the budget of Erbil or Iraq".

Pyatt stressed the importance of reopening the Iraq-Turkey oil pipeline, noting that "crude oil production in the Kurdistan Region has nearly returned to pre-pipeline closure levels. He urged both Baghdad and Erbil to "negotiate and find a solution that benefits both the federal Iraq and the Kurdistan Region".

Regarding allegations of oil smuggling against the Kurdistan Region, in a recent interview with Al Arabiya, Masrour  Barzani KRG Prime Minister called on accusers to present tangible evidence. He reiterated that the halt in oil exports, which began on March 25, 2023, following an International Court of Arbitration ruling in favor of Iraq in its lawsuit against Turkey, had devastating financial repercussions for the region.

A significant topic discussed during the meeting between the Iraqi delegation and the US Secretary of State was the pursuit of Iraqi energy independence, aiming to eliminate the need for electricity imports from Iran.

Dilan Ghafoor reported that Blinken urged Iraq to make every effort to reduce its reliance on Iranian electricity, stating, "We may not be able to continue to renew the exemption for Iraq from buying Iranian electricity." This remark was made during the meeting.

Mohammed Shia al-Sudani highlighted Iraq's commitment to this goal, indicating that the country is actively collaborating with US and international companies to achieve energy independence.

The head of the Foreign Relations Committee of the Iraqi Parliament expressed that the discussions with the US were crucial for both parties and for shaping the future of bilateral relations between Iraq and the United States.

The Iraqi delegation is set to participate in the Summit of the Future, organized by the United Nations in New York, coinciding with the 79th session of the UN General Assembly, which will continue until September 28. Yesterday, the Iraqi Prime Minister addressed the summit, emphasizing his government's initiatives aimed at development and reform, particularly in the economic sector.