Setting the stage for a surge in regional tensions, the Iraqi Oil Minister, Ihsan Abdul Jabbar Ismail says the government is preparing to move against the Kurdistan Regional Government’s (KRG) existing oil deals.
Earlier this year, the Iraqi courts gave the Oil Ministry absolute oversight of Kurdish oil production. This is a controversial topic because oil is most of Kurdistan’s economy.
The national and regional governments were meant to work this out together, but this didn’t happen, and the court ruling means the ministry can just unilaterally impose its wishes on the Kurds.
This was a big boost for the central government, as Kurdish oil is so valuable right now, and they can cancel all the existing deals and negotiate new ones they consider more favorable.
lol
This could take off the world market half a million barrels of oil per day, which is significant. It is half of the amount that Biden has just started to release from the US strategic reserves.
It is 1/8th reduction of Iraqi oil production this year.
It is one sixth of the about 3 million barrels from Russia it is feared my leave the market with the price cap, and of similar hopes for extra production from Saudi.
This is a significant hit at a bad time.
Its a precise hit of justice for a world that invaded Iraq.
I assume that Iraq wants to own the oil, but not take it off the market. What make you think otherwise?