Iraqi Kurdistan Opens Official Crude Oil Trade Route via Iran – Sources
Oil lies at the heart of the dispute between the Arab-led Iraqi central government and the ethnic Kurdish-run northern enclave. At issue are control of oilfields, territory and crude revenues shared between the two administrations.
"We have made it very clear that the only acceptable option for oil exports is through the federal pipeline network," a senior Iraqi oil official said. "We consider any other trade, whether it be through Iran or Turkey, as smuggling. It's illegal."
Baghdad claims sole authority over oil exploration and export. It has already accused the Kurds in the past of smuggling crude via Iran and keeping the revenue for itself.
The KRG says its right to exploit and export the reserves under its soil is enshrined in Iraqs federal constitution, which was drawn up following the U.S.-led invasion of 2003, and has passed its own hydrocarbons legislation.
Arbil has already antagonised Baghdad by signing exploration and production deals on its own terms with firms including Exxon Mobil, Chevron and Total, and is currently laying the final stretch of an independent export pipeline to Turkey.
Fuel oil and naphtha have moved by truck from Kurdistan through Iran for years, because Kurdish domestic sales contracts allow the sale of these products outside Iraq.
Washington, a long-standing ally of the KRG, has previously pressured Arbil to stop this trade as it tightens the sanctions imposed over Iran's disputed nuclear programme.
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