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Iraqi Oil Ministry: $3bn losses a month due to suspension of oil exports

July 17, 2014 at 3:08 pm

Iraq is losing about $2.8 billion a month due to the suspension of exports from the country’s northern regions, the country’s Oil Ministry announced.

Assem Jihad, a spokesman for the Iraqi Oil Ministry, told the Anadolu news agency that Iraq is losing about $1.5 billion per month, due to suspension of the exportation of oil through the Kirkuk pipeline that reaches the Turkish port of Ceyhan, and about $1.3 billion, as a result of the inability of Iraq’s Kurdistan region to export 400,000 barrels of oil, as is stated in the 2014 budget.

Since June 10, 2013, Iraq has witnessed a turbulent security situation after the Islamic State of Iraq and the Levant (ISIS) seized control of large areas of the north, east and west of the country. ISIS is supported by armed insurgent groups that are opposed to the Shia-dominated government.

Iraq is incurring other losses due to ISIS’s control of a number of Mosul’s crude oil fields which are sold by ISIS to other entities for $27 per barrel, Jihad explained. In addition, they now sell a number of oil derivatives after many reservoirs in Mosul, Diyala and Salahuddin were robbed.

Iraq exported about 400 barrels of oil fields per day in Kirkuk through the Turkish port of Ceyhan. However, exportation through that line has stopped since February last year when the pipeline was subjected to sabotage operations.

A media advisor at the Parliament of Kurdistan of Iraq said that these statements are just attempts to justify the failure of the Iraqi government to manage this important file whereas it is actually unable to protect the pipeline.

The Federal Ministry of Oil has announced earlier that it had filed a lawsuit against the Ministry of Natural Resources in the region of northern Iraq on charges of exporting oil without the consent of the government in Baghdad after the government of the northern Iraqi region had announced the sale of 1.4 million barrels of oil through Turkey.

Northern Iraq exports its oil production via Turkey through the 1,000-kilometre long pipeline that runs through the Mediterranean and links the city of Kirkuk, northern Iraq, and the Turkish port of Ceyhan, southeast Turkey.

Economists believe that the continuation of the conflict between Baghdad and Erbil incurs Iraq significant losses. As a result of tensions, the Iraqi budget has not been approved as of yet.