Kurds Halt Oil Exports

Payment Dispute with Baghdad

The Kurdistan Regional Government has halted oil exports from its region over a payment dispute with the central government in Baghdad. The move further deteriorates the relations between Baghdad and Kurdistan as well as the oil supply situation in the region.

In a 2011 arrangement with the central government, the Kurds send the oil to Baghdad and receive 50 percent of the revenues. The Kurdish Ministry of Natural Resources said in a statement on Sunday that Baghdad has failed to send any money since May, even though the Kurds has been exporting 50,000 barrels per day.

"After consultation with the producing companies, the Ministry has reluctantly decided to halt exports until further notice," the Kurdish statement said. "There have been no payments for 10 months, nor any indication from federal authorities that payments are forthcoming."

Today, Iraqi Deputy Prime Minister Hussain al-Shahristani accused Kurdish authorities of smuggling huge amounts of oil to neighboring countries, mainly Iran. He added that the Kurds were withholding about $5.65 billion in revenues generated from unreported oil sales since 2010.

The Kurdish move came as the Iraqi Oil Ministry reported the highest oil exports in March since 1989, thanks to a new offshore export terminal in the Persian Gulf. March oil exports averaged 2.317 million barrels a day that generated $8,475 billion. February's sales grossed $6.595 billion.

Source: AP, 2 April 2012