BAGHDAD: Iraq’s Oil Ministry has accused the Kurdistan Regional Government (KRG) of refusing to allow the use of its pipeline network as an alternative route for crude exports disrupted by the ongoing Iran conflict, Pakistan Digital News reported.
According to Iraqi officials, authorities in the Kurdistan region placed several conditions that Baghdad described as unrelated to the urgent issue of restoring crude oil flows.
However, a senior Kurdish government official told Reuters that the region would be willing to allow the Iraqi government to use the pipeline. He said Baghdad must first remove what he called a “dollar embargo” imposed on the Kurdistan region.
“We want a deal. We want to help Iraq and provide relief to global oil markets, but this embargo must end first,” the official said.
Oil production from Iraq’s main southern oilfields — which normally account for the majority of the country’s exports — has dropped dramatically. Sources told Reuters on March 8 that output has fallen by nearly 70 percent to around 1.3 million barrels per day after the Iran conflict disrupted shipping through the crucial Strait of Hormuz.
Earlier in March, Iraq’s Oil Ministry reportedly sent a letter to the Kurdistan Regional Government requesting permission to transport at least 100,000 barrels per day of crude oil from the Kirkuk oilfields through the Kurdistan pipeline system to Turkey’s Ceyhan energy terminal.
Kurdish officials say the dispute is linked to broader economic tensions between Erbil and Baghdad. They claim that restrictions preventing Kurdish banks from accessing U.S. dollars for imports through regional borders and airports have worsened the situation.
Officials in the Kurdistan region also say relations with Baghdad have become more strained after the federal government introduced a new electronic customs system designed to monitor imports and revenues. The Kurdistan Regional Government believes the system could weaken its financial independence and control over trade.
Meanwhile, Iraq’s Oil Ministry maintains that the Kurdistan Regional Government’s Ministry of Natural Resources has attached several conditions that are not directly related to the resumption of crude oil exports.
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