Top oil trader Vitol has apologised to the Iraqi government for buying Kurdish oil that was exported via Turkey without Baghdad’s permission, Iraqi Oil Minister Abdul Kareem Luaibi said.
Baghdad is in dispute with Kurdistan over oil exports from the northern Iraqi province, insisting the central government has the sole right to export oil, reimbursing payments to the Kurdistan Regional Government (KRG). It considers any other business illegal and tantamount to smuggling by the Kurds.
The KRG says exports on its own behalf are legitimate. Luaibi, in Vienna for an Opec meeting, was asked by reporters how Iraq was dealing with three companies – Vitol, Trafigura and Lukoil – who have purchased condensate, a light crude oil, sourced from Kurdistan and sold via an intermediary to world markets.
“In terms of Vitol, they have cancelled the Kurdish amount and they apologised officially,” said Luaibi. “As for Lukoil, there will be a meeting about this concern – maybe tomorrow or the day after.”
He made no mention of Trafigura.
Kurdistan began selling oil into international markets in independent export deals in October, further challenging Baghdad’s claim to full control over Iraqi oil after signing independent exploration deals with foreign oil majors last year. Luaibi said Kurdistan is now supplying less than 100,000 barrels a day (bpd) to the central government via a Baghdad-controlled pipeline to Turkey, compared to the 200,000 bpd it has agreed to deliver. Output from Kurdistan is rising but is still only a fraction of total Iraqi exports of 2.6 million bpd (mbpd).
