Crude supplies from Iraq's semi-autonomous Kurdish region have started to head to European refiners, although no sign of a deal between the area's Kurdistan Regional Government (KRG) and Iraq's federal government has emerged.
The United Leadership tanker is loading almost 1mn bl at the Botas terminal at Ceyhan, Turkey, according to shipping data, while 3-4 cargoes of KRG crude have already been sold. All of the cargoes are understood to be heading to Italy, although no details could be confirmed.
KRG crude has been flowing at around 100,000 b/d through a new pipeline running inside Iraqi Kurdistan to Fishkhabour at the border with Turkey, filling 2.5mn bl of allocated storage at Ceyhan.
Previously, it was understood that KRG crude would not be sold from Ceyhan until a deal was struck between the KRG and Baghdad, with Iraq's government stating only it has the authority to sell such crude.
Turkey had previously said it expected sales of the crude to begin once the 2.5mn bl of allocated storage at Ceyhan was full. The facility has a total capacity of about 10mn bl and is mainly used to store Kirkuk crude exported by the central Iraqi government, which is kept separately from the KRG oil. But energy minister Taner Yildiz said on 7 May that if stored KRG crude was not sold in the coming days, Turkey could devote more capacity to storing the flow from northern Iraq.
The decision to sell the crude is "the Iraqis' — it is our Iraqi brothers who will offer it on international markets", the Turkish minister said. "When they sell, we will make the transfer."
Flows of Iraq's Kirkuk crude through the bomb damaged Kirkuk-Ceyhan pipeline have now been halted for nearly 80 days, with no reliable restart date yet emerging.
Pumping stopped on 4 March, following a bomb attack on the Iraqi side of the pipeline. Supplies have previously been frequently disrupted by sabotage and pumping problems, although this stoppage is by far the longest experienced.
Iraq's authorities have previously said exports will resume through the pipeline by the end of June, although the security situation in the bomb affected area is understood to remain poor.
Mediterranean refiners are substituting Kirkuk with fellow Iraqi grade Basrah Light, as well as Russian sour Urals crude. Although the lack of Kirkuk in the region should support, poor refining margins have dragged down differentials for both grades so far this month, with Urals falling around $2/bl and Basrah Light down around 75¢/bl.
Kirkuk usually exports around 300,000 b/d, although the ageing pipeline has a nameplate capacity of 1.5mn b/d.
jw/et
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