Turkey silent on Iraq crude export resumption request

Iraq's oil ministry has informed Turkey that crude exports from the Mediterranean port of Ceyhan can restart as soon as 13 May. But crucially the Turkish government, which is preparing for elections on 14 May, has given no indication of when flows may resume.

Turkey's state-owned Botas, which operates the Turkish section of the pipeline that carries Kirkuk grade crude from northern Iraq crude to Ceyhan, refused to comment on the matter. Only one tanker is waiting to load Iraqi crude at the port.

Turkey halted flows through the pipeline that usually transports around 470,000 b/d of northern Iraqi crude — including 400,000 b/d marketed by the Kurdistan Regional Government (KRG) — to Ceyhan on 25 March, after an international arbitration ruling said Ankara had breached an agreement by allowing Kurdistan crude to be exported without Baghdad's consent.

While Baghdad and the KRG have resolved their own dispute about exports through Ceyhan, Turkey's approval is essential for these to resume. Ankara is holding out on paying $1.47bn in compensation to Baghdad for breaching a bilateral agreement concerning the pipeline.

The KRG could not be reached for comment.

Any progress is unlikely until after Turkey's presidential and parliamentary elections on 14 May. If the first round of the presidential election is inconclusive, a second round will be held on 28 May.

"We should have [Kurdistan crude] in the market from June," a market source told Argus.

Iraq's oil ministry also said state-owned marketing firm Somo had concluded new contracts with unnamed international trading companies for the sale and marketing of Kurdistan crude from Ceyhan. The KRG previously had contracts with Energopole, Vitol, Trafigura and Petraco.

The disruption to exports has led to the shutdown of most, if not all, crude production in the semiautonomous Kurdistan region. This has seen key operators such as Norway-based DNO and UK listed Genel Energy announce plans to roll back investments until the situation is resolved.

By Aydin Calik and Kuganiga Kuganeswaran