Negotiations to resume Iraqi Kurdistan oil exports to Turkey have stalled again due to pricing disputes. A U.S. diplomat attended these discussions, amid escalating pressure from the Trump administration on Iraq to reactivate exports, which are pivotal for global oil supply and U.S. sanctions strategies against Iran.
Discussions aimed at resuming oil exports from Iraqi Kurdistan to Turkey, which have been suspended for two years, concluded without a resolution for the second time within a week. The stand-off has impeded oil flows to Turkey’s Ceyhan port, with ongoing disagreements on key issues. On this occasion, a U.S. diplomat participated for the first time, signalling heightened pressure from Washington to reinstate the exports.
The U.S. administration has emphasized the need for Iraq to restart oil flows, threatening sanctions should they fail to comply. This initiative aligns with the U.S. strategy of applying maximum pressure on Iran by aiming to limit its oil export capabilities. Key discussions revolved around pricing criteria, which proved to be a substantial hurdle.
At previous meetings, the Iraqi oil ministry proposed a production cost of $16 per barrel for approximately 185,000 barrels per day without applying that rate uniformly across all Kurdish production, a condition that foreign oil firms vehemently opposed. This pricing issue had also been a focal point in earlier negotiations, affecting relations between the Iraqi Kurdistan entities and Baghdad.
An Iraqi oil ministry official remarked on the U.S. diplomatic involvement, noting that this presence was intended to facilitate negotiations satisfactorily for all parties involved. This reflects a strong U.S. incentive to ensure that discussions lead to a successful outcome, benefiting both the Iraqi economy and global oil prices. However, Iraq remains cautious of entanglement in the geopolitical tensions between the U.S. and Iran amid existing sanctions.
In summary, recent negotiations to resume oil exports from Iraqi Kurdistan to Turkey underscored critical pricing disagreements, thwarting progress despite U.S. diplomatic involvement. The U.S. aims to reinstate these oil flows as part of broader geopolitical strategies, but Iraq’s delicate position between U.S. and Iranian interests complicates the discussions further. Without a resolution, Iraq continues to face economic pressures linked to these stalled exports.
Original Source: www.marketscreener.com
