A worker checks pipelines at Kirkuk's Bai Hassan oil field after control of the site was taken by Iraqi forces this week. Photo: AFP | Jiji
ERBIL, Kurdistan — Iraqi Oil Minister Jabar al-Luaibi has revealed that Iraq will start sending 30,000 barrels of oil per day through tankers to refineries in Iran before the end of the January.
"God willing, we will start before the end of the month," the minister was quoted by Reuters as saying.
Iraq initially announced the planned deal with Iran in November 2017, negotiated by Iraq's State Organization for Marketing of Oil (SOMO), to export 30,000-60,000 barrels per day to Iran's Kermanshah province.
The deal stipulated that Iraq receives the same amount of oil from Iran through its southern borders.
According to the ministry’s most recent statistics, Iraq exported more than 103,730,650 barrels of oil in October, according to the ministry. This totaled more than $5.455 billion in revenue, which the ministry stated is for the purpose of “publishing for the people.”
Iran’s Oil Minister Bijan Namdar Zangeneh, a Kurd from Kermanshah, told Rudaw in November 2017 at an OPEC meeting in Vienna that that it is likely they will sign a contract to give related companies the mandate to assess an oil pipeline from Kirkuk to Iran.
The oil-rich Kirkuk province came under Iraqi federal control in October 2017 when Iranian-backed Hashd al-Shaabi paramilitaries in Iraq and the Iraqi army gained control of the city and its oil fields.
Shortly thereafter, British Petroleum (BP) began to work in Kirkuk's oilfields. BP had tried to operate in Kirkuk in 2003, but stopped after the Kurdistan Regional Government (KRG) said operations must be done in coordination with Erbil given the legal status of the province.
With the loss of the oil fields, the Kurdistan Region can no longer export Kirkuk’s oil to global markets through a pipeline that terminates at the Turkish port of Ceyhan.
KRG Prime Minister Nechirvan Barzani has said the regional government's revenues “have been slashed by half” since the loss of oil-fields in Kirkuk.
The KRG has not received its 17 percent share of the Iraqi federal budget since early 2014, namely because of disputes over the Kurdistan Region exporting oil.
Iraq’s draft 2018 budget proposes the KRG receiving 12.6 percent.
A representative of the International Monetary Fund told Rudaw on December 22 that Iraq's 2018 budget share proposals "do not suffice in our view to cover the needs of the Kurdistan Regional Government.”
Iran, which ranks in the Top 4 of countries of proven oil reserves, announced that fuel prices for 2018 would double. The rising cost of goods in Iran was a major complaint of anti-government protests which began on December 28, 2017.