Iraqi Kurdistan’s oil export negotiations with Turkey have failed again, mainly due to price disputes. The U.S. has increased pressure on Iraq to resolve these issues, highlighting its significance in relation to sanctions on Iran and global oil supply stability. Key foreign oil companies have rejected Iraq’s pricing model, complicating discussions further.
Negotiations regarding the resumption of Iraqi oil exports to Turkey have repeatedly failed, with talks ending without a deal for the second time in a week. For two years, oil flows from Iraqi Kurdistan to Turkey’s Ceyhan port have been halted, primarily due to disagreements over pricing and payment terms.
This week’s discussions marked the first instance of a U.S. diplomat officially attending these negotiations, held at Iraq’s oil ministry in Baghdad. The United States has been urging Iraq to resume exports, with President Trump’s administration warning of potential sanctions if Iraq fails to comply.
The tensions revolve around a proposed production cost set at $16 per barrel for an expected export volume of approximately 185,000 barrels per day. However, there has been pushback from foreign oil companies that operate in Kurdistan, including DNO, Genel Energy, and Gulf Keystone Petroleum, among others. Iraq initially agreed to apply this price across all production but later retracted this offer.
The inclusion of a U.S. official in the talks was intended to facilitate progress in negotiations and address the obstacles preventing the resumption of oil exports that would benefit all stakeholders involved. There is significant U.S. interest in restarting oil flows to suppress global prices and sever financial connections between Iraq and Iran, especially as the U.S. applies pressure on Tehran regarding its nuclear program.
As Iraq attempts to navigate its diplomatic relationships with both the U.S. and Iran, it remains cautious of geopolitical repercussions that could affect its dealings and economic stability under sanctions.
In summary, the negotiations for resuming Iraqi oil exports to Turkey have stalled again due to unresolved pricing disagreements, despite U.S. diplomatic pressure. The participation of a U.S. official aimed at facilitating these discussions highlights the importance of this issue within the broader context of U.S.-Iran relations. Continued failed negotiations could complicate Iraq’s standing amid increasing international scrutiny.
Original Source: www.marketscreener.com
