The Kurdistan Regional Government (KRG) has been pumping crude oil through the Ceyhan-Kirkuk oil pipeline. This has been ongoing since the beginning of the year. The crude oil from northern Iraq has been put into storage facilities inside Turkeys Ceyhan oil terminals and it is waiting to be sold at the world market. The Turkish government has been assisting the KRG and already has already set up bank accounts with a state-owned bank to deposit the oil funds. Since last year, the KRG has also been using the Ceyhan-Kirkuk Oil Pipeline to deliver crude oil to the storage facilities at a rate of approximately 100k barrels a day. Recently, the Turkish Energy Minister, Taner Yildiz, stated in local media that the storage facilities holding Iraqi oil are full and that there are no obstacles for selling it. There are 2.2 million barrels of Iraqi oil inside the Ceyhan storage oil terminals. The storage capacity of the Ceyhan oil terminal is 2.5 million barrels of crude oil. The central Baghdad government is in dispute with the KRG for acting on its own in regards to selling oil outside of the country without the oversight of the Iraq government. In February, the KRG agreed to export crude oil by using the State Oil Marketing Organization (SOMO).
Turkish Energy Minister Don’t worry we won’t sell the Iraqi Oil
In early May, the Turkish Energy Minister, Taner Yildiz stated that Turkey would not sell the Iraqi oil without the approval of the Baghdad government. Yildiz stated, “Oil in the region belongs to Iraq, and our Iraqi brothers will present the oil to the international market.” On May 23, Yildiz stated that at 10pm the Turkish government began to ship the Iraqi oil from its Ceyhan port and has sold the Iraqi crude oil on the international market. The Iraqi oil was loaded onto oil tankers and sold to the customers in Europe and the USA.
The Iraq central government authorized the KRG to export Oil – Just following three conditons
In the past, the central Baghdad government has set conditions for the KRG to export oil from the north. It was agreed upon that the KRG would be able to export Iraqi oil out of the country if they followed three conditions. Those conditions were: One, that the quantities of Iraq oil must be known to the Baghdad central government, secondly, Iraq oil must be sold at international market prices and lastly, the sales revenue must be deposited inside the Development Fund for Iraq (DFI) in New York. The three conditions were not implemented to be difficult they just needed to have transparency and accountability by the KRG. However, the KRG still remains non-compliant. They refuse to give the Iraqi people the transparency and accountability in dealing with their own country valuable resource.
U.S. official sends out tweet
On the same day (23 May) the Turkish Minister made the announcement. The U.S. deputy Assistant Secretary of State for Near Eastern Affairs, Brett McGurk, sent out a tweet on his twitter account stating, “The US does not support export of oil from any part of Iraq without the appropriate approval of the federal government.” Someone should have warned McGurk prior to that announcement that an oil tanker was already currently carrying Iraqi oil was bound to the USA.
The oil tanker carrying Iraqi Oil changes its travel plans
On 30 May, The United Leadership Oil tanker carrying oil and bound for the U.S. Gulf Coast, reversed its course and was then headed to the Marshall Islands. Within hours of hearing of this announcement by the Turkish press, the Iraqi government filed a complaint with the International Chamber of Commerce.