Iraq crude exports via Ceyhan suspended after court victory
Quantum Commodity Intelligence – Iraq's northern oil exports wered suspended Saturday after an international court of arbitration ruled Turkey had violated a bilateral treaty by facilitating independent pipeline flows from the Kurdistan Regional Government (KRG)¸ according to the specialist Iraq Oil Report.
The ruling marks a blow for the Kurdistan Region Government’s (KRG) pursuit for autonomous control with around 400,000 bpd of crude under threat, which is sold to international markets via the Ceyhan terminal.
The pipeline shutdown also closes off around 75,000 bpd of federal Iraqi exports via the KRG-controlled pipeline, added IOR.
"The Oil Ministry welcomes the final ruling in Iraq’s favor," the ministry said in a statement, adding that it would "explore mechanisms to export Iraqi crude via the Turkish port of Ceyhan with the relevant authorities in the Kurdistan region and with the Turkish authorities."
Oil for now has been diverted to storage tanks, which is limited and can store a few day’s worth of production.
The long-running dispute centre’s on KRG’s plans to control oil production and sales from the Kurdish region of Northern Iraq, but the International Chamber of Commerce’s International Court of Arbitration has ruled in favour of Baghdad.
In the arbitration case, the Paris-based court ruled that had Turkey violated a 1973 pipeline transit agreement by allowing crude from the Kurdish region to be exported without Baghdad’s approval.
The region had already been struggling to maintain output after a number of international companies left last year, including TotalEnergies and several oil service firms.
More recently, key buyer Trafigura halted lifting KRG-controlled Kirkuk crude, which has been trading at steep discounts on the spot market since last year as a number of refiners shun the grade, fearing being blacklisted by Iraq’s SOMO.