Kurdistan Suspends Oil Exports in Payment Dispute

Halted Shipments Cost $20 Million a Day

by Jason Ditz, December 25, 2012

The Kurdistan Regional Government (KRG) has halted all oil exports through their region, a top adviser reveals, because the center government underpaid them on what was agreed in previous negotiations.

The KRG had previously halted oil exports in April, leaving them stalled for much of the summer until an agreement to pay was negotiated. Where they expected 1 trillion Iraqi dinars, however, the central government only came through with 650 billion.

Iraq’s central government claimed that the cut was because the KRG had exported somewhat less oil than they expected, but with the two sides increasingly at odds, the whole thing has ground to a halt now, at a cost of $20 million a day.

Iraq and the KRG are already tottering on the brink of a full-scale civil war, with ownership of the oil fields on their mutual frontier at the center of the fight. With oil remaining a big issue, it is unlikely that any major concessions will be made soon by either side.

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