Kirkuk to send oil to Iran as early as January

It has been made known by Jabar al-Luaibi, Iraq’s Minister of Oil, that Iraq will begin sending Iran approximately 30,000 barrels of oil a day around the end of January. Jabar was quoted  saying, “God willing, we will start before the end of the month.” The plan to sell the oil to Iran was announced in November 2017, shortly after the Kurdish Peshmerga were pushed out of Kirkuk, by Iraq’s State Organization for Marketing Oil. SOMO made the bold declaration that they would be sending an estimated 30,000-60,000 barrels a day to the province of Kermanshah in Iran.

The ministry is reporting that more than 100 million barrels total were exported in October 2017 with a revenue totaling upwards of $5.455 billion. When asked about this, the ministry declared that the statistics were “published for the people.” Bijan Namdar Zangeneh, Iran’s Minister of Oil and a Kurd, stated that Iran will probably sign a contract to allow private companies the authorization to evaluate an oil pipeline out of Kirkuk and into Iran, during an November 2017 OPEC meeting in Vienna, Austria.

Iraq seized control of the Kirkuk oilfields that same month with the aid of Iranian-backed paramilitary units and the Iraqi Army. Thereafter British Petroleum, the worlds largest oil company also known as BP, was brought in to bring the oilfields to working order. BP attempted to do this previously in 2003 but was halted by the Kurdish Regional Government for reasons pertaining to the legal status of the Kirkuk province.

Because Kurdistan lost the oil fields to Iraq, they can not export oil through a pipeline that ends in Ceyhan, Turkey as previously planned. Nechirvan Barzani, a Prime minister for the Kurdish Regional Government, said the KRG’s revenue “has been slashed by half” after losing Kirkuk and its subsequent oilfields. Because of the KRG oil exportation disputes between the Kurds and Iraqi government, it has been since 2014 that the KRG has received its percentage of Iraq’s federal budget.

A draft of the new budget for 2018 has been proposed by Iraq and will see the KRG receives 12.6 percent if it is accepted. On December 22, an International Monetary Fund representative declared that the 2018 proposed budgets “do not suffice in our view to cover the needs of the Kurdistan Regional Government.”

Iran is among the top four countries that possess substantial oil reserves but has proclaimed that in 2018 fuel prices will double. This was one of the many issues that triggered the recent mass protests that swept through Iran this past December. It is becoming clear at this point that there was a great deal of collaboration involved with Kirkuk changing hands. With BP’s involvement and the cooperation seen between Iraq and Iran, there is definitely some forethought to what is happening in regards to Kirkuk’s oil. Then again, none of this is really a surprise if you follow the region’s events and their timeline.