By Frsat Said Shkur
The Resumption of Oil exports will have a positive impact on the economic recovery of the Kurdistan Region, because oil is its main source of income, and will also affect the economic recovery of Iraq There is trade between countries, and even political problems are often solved through economic ties.
Why is theresumption of oil exports necessary?
First:Oil exports are a major source of revenue for the KRG, which is needed to fund public services such as health care, education, and infrastructure development.
The region will rely heavily on these revenues to maintain stability and economic growth, even if it is under the control of the federal government, but the Kurdistan Region will be represented on the High Committee on How to Export Oil.
Second: Oil exports play a significant role in the overall Iraqi economy, contributing to national income and economic stability.
The Kurdistan Region’s oil fields are among the most productive in Iraq and their products contribute significantly to the country’s total oil production.
Third:The resumption of exports will help strengthen the Kurdistan Region’s “autonomy” and political stability within Iraq.
Oil revenues provide leverage for the KRG in negotiations with the federal government, facilitating discussions on constitutional issues, revenue sharing, and political autonomy.
Furthermore, international oil markets will benefit from increased supply diversification, which is likely to stabilize global oil prices.
The oil reserves of the Kurdistan Region are significant enough to have a positive impact on the energy dynamics of the region.
Geopolitically: From a geopolitical perspective, stable oil exports from the Kurdistan Region promote regional stability by providing economic incentives for peaceful cooperation among Iraq’s diverse ethnic and sectarian groups.
The damage caused by the suspension of oil exports from the Kurdistan Region
The Kurdistan Oil Industry Association (KOIC) said on April 12, 2024 that the suspension of oil exports from the Kurdistan Region will cause a loss of $14.5 billion.
According to statistics, the global energy market is losing about 400,000 barrels of oil per day due to the suspension of oil exports, which has led to higher oil prices, so the lack of an agreement to resume oil exports has caused a loss of $ 14.5 billion.
Kurdistan Regional Government oil in the world oil market
Before the suspension of oil exports, European countries accounted for 76% of the buyers of oil from the Kurdistan Region, followed by Italy with 34% and Greece with 20%. China is the third largest buyer of Kurdistan Regional Government (KRG) oil with 7%.
Turkey is ready: Turkey wants to export oil from the Kurdistan Region and has repeatedly said that the refineries are technically ready.
International oil companies in the Kurdistan Region of Iraq (KRG) have accused the Iraqi government of not wanting to resume oil exports from the Kurdistan Region despite the fact that the pipeline is ready.
One of the problems between the Kurdistan Regional Government and the Iraqi government is the contracts of international oil companies and the cost of oil production.
In conclusion, Baghdad, Erbil and Ankara are in talks to resume oil exports from the Kurdistan Region of Iraq (KRG) since March 25, 2023 and autonomy and cooperation within Iraq and the wider region of the Middle East.
The resumption of oil exports from the Kurdistan Region is not only economically beneficial, but also promotes stability, autonomy and cooperation within Iraq and the wider Middle East region.