Kurdish Oil Hits International Market for the First Time

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Kurdish Oil Hits International Market for the First Time

Kurdish oil shipments amounting to more than one million barrels reached Europe through Turkey yesterday, the minister for energy in Turkey and the Iraqi Kurdish administration said. Iraq’s government could go to court over the sale.

Turkey’s minister for energy Taner Yildiz said on Friday that the oil shipments left the Turkish Mediterranean oil terminal based in Ceyhan at 10 pm on Thursday, Bloomberg reported. Yildiz added that the consignment was likely headed for Italy or Germany.

Iraqi condemned the sale of oil without the nod of its oil ministry as illegal.

According to ABC, Iraq has warned it will take legal action against those buying oil from the Kurdish region. Officials from the Iraqi oil ministry and its marketing firm SOMO said they “reserve the right” to commence litigation against oil companies shipping oil from Ceyhan without permission from Baghdad.

The Kurdish administration, which runs the semi-independent Kurdish area of northern Iraq, said the oil deliveries did not violate the Iraqi constitution.

Earnings will be deposited in an account controlled by the Kurdistan Regional Government at Halkbank in Turkey. KRG said the proceeds will be handled as a component of its budgetary rights as provided for under the Iraq’s 2005 charter stipulating the terms for revenue sharing and distribution.

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“The KRG will continue to exert its rights of export and sell oil independently of SOMO,” the Kurdish administration said via an official website.

However, Marie Harf, spokeswoman of a US State Department said the country did not “support oil exports from any part of Iraq without the appropriate approval of the federal Iraqi Government.”

But the KRG said it was still taking seriously the need to engage in talks with Baghdad to reach a broad agreement on the oil matter. The authority said 5% of the shipments’ proceeds would be set aside for use in fulfilling Iraq’s obligations to the United Nations.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com