Smuggling or deserved autonomy? Kurdistan's second route for crude via Iran
Baghdad claims sole authority over oil exploration and export. It has already accused the Kurds in the past of smuggling crude via Iran and keeping the revenue for itself
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Iraq’s Kurdistan region is exporting crude oil by truck to an Iranian port for shipping to Asia, industry sources said.
In a dispute largely over revenue sharing, Kurdistan’s crude exports through a pipeline controlled by the Iraqi central government dried up last year. However, it is transporting about 50,000 barrels per day (b/d) of crude and condensates by road from the landlocked region through Turkey.
Now the Kurdistan Regional Government (KRG) has approved a second route for crude through Iran used previously only for petroleum products, the sources said.
For the past two months, crude has been trucked from Kurdish fields over the border to Iran’s Bandar Imam Khomeini (BIK) terminal, 900km to the south on the Persian Gulf. Amounts are unclear but could be as much as 30,000 b/d, they said.
One industry source in Kurdistan said the regional government in Arbil was anxious not to put out either of the region’s powerful neighbors, Turkey and Iran, in transporting the crude. “It’s a political compromise,” said the source, who declined to be identified. “They cannot ignore the Iranians and go all the way... with the Turks. They have to balance.”
Asked about the route, the Kurdish government did not comment on the record, although a KRG official source denied any crude was going through Iran yet.
Oil lies at the heart of the dispute between the Arab-led Iraqi central government and the ethnic Kurdish-run northern enclave. At issue are control of oil fields, territory and crude revenues shared between the two administrations.
“We have made it very clear that the only acceptable option for oil exports is through the federal pipeline network,” a senior Iraqi oil official said. “We consider any other trade, whether it be through Iran or Turkey, as smuggling. It’s illegal.”
Baghdad claims sole authority over oil exploration and export. It has already accused the Kurds in the past of smuggling crude via Iran and keeping the revenue for itself. The KRG says its right to exploit and export the reserves under its soil is enshrined in Iraq’s federal constitution, which was drawn up following the US-led invasion of 2003, and has passed its own hydrocarbons legislation.
Arbil has already antagonized Baghdad by signing exploration and production deals on its own terms with firms including ExxonMobil, Chevron and Total, and is currently laying the final stretch of an independent export pipeline to Turkey