Turkey threatens to block Kurdish oil exports
More than 93% of voters approved the referendum for independence from Iraq
Turkey can choose to “close the valves” on oil exports from Iraq’s Kurdish region through the Turkish port of Ceyhan, President Recep Tayyip Erdogan warned as Kurds voted in a referendum on independence from Iraq.
The landlocked Kurdish enclave in northern Iraq can ship as much as 700,000 barrels a day through the pipeline to Ceyhan on the Mediterranean. The Turkish president’s comments served as a reminder that Iraq’s semi-autonomous Kurdistan Regional Government depends on good relations with neighbouring Turkey for most of its oil sales. Turkey, which has its own restive Kurdish minority, opposes the Kurdish independence referendum.
More than 93 per cent of voters approved the referendum for independence from Iraq, with 2.8 million votes counted, the Kurdish Rudaw news agency tweeted yesterday.
“Let’s see where the regional government will flow its oil, through which channels and where it will sell it,” Erdogan said in Istanbul on Monday. Turkey, which is both a customer and a conduit for Kurdish oil, is ready to intervene as it did in Syria, he said, referring to a cross-border military operation last year. “We may arrive one night, suddenly.”
Oil pumped at fields controlled by the KRG and the central Iraqi government’s North Oil Co was flowing normally through the export pipeline on Monday, according to two people familiar with the matter, asking not to be identified because the information is confidential.
Iraq’s Kurdish region could hold 45 billion barrels of crude reserves, more than Opec member Nigeria, according to KRG data. The region pumped about 544,600 barrels of oil a day in 2016 and is expected to boost output to 602,000 barrels this year, consultant Rystad Energy said in April. Last year’s production represented about 12 per cent of the supply from Iraq, the second-biggest producer in the Organisation of Petroleum Exporting Countries.
The referendum wasn’t limited to the three Kurdish governorates, or provinces, of Iraq; people in the disputed, oil-rich area of Kirkuk also participated in the poll. Iraq’s central government condemned the KRG for including Kirkuk in its referendum and has threatened to retaliate. In Baghdad, parliament approved draft legislation ordering the closure of borders with the Kurdish region and the deployment of troops to areas under Kurdish control since the Daesh offensive of 2014.
The vote was “laying the ground for hot conflict,” Turkey’s Prime Minister, Binali Yildirim, said on Monday. Turkey now considered the Iraqi government the sole counterparty in its arrangement over oil exports to Turkey’s Mediterranean coast, he said.
Kurdish exports averaged 515,000 barrels a day last year, according to cargo tracking compiled by Bloomberg News.