Recent talks to resume Iraqi oil exports to Turkey concluded without agreement due to pricing disputes. U.S. diplomats attended for the first time, emphasizing the importance of negotiations. Iraq aims to manage its relations with the U.S. and Iran amidst these complexities.
On March 6, negotiations to renew oil exports from Iraqi Kurdistan to Turkey concluded without an agreement. This failure marks the second unsuccessful attempt within a week, attributed primarily to disagreements over pricing and payment terms. The halt in oil flows from the Kurdistan region had persisted for the past two years, affecting shipments to Turkey’s Ceyhan port.
For the first time, a U.S. diplomat participated in the discussions held at the Iraqi oil ministry in Baghdad. Washington has been actively pressuring Iraq to resume exports, as reported previously by Reuters, with the Trump administration indicating that continued delays may result in sanctions. This U.S. stance is influenced by its campaign to curtail Iranian oil exports amid ongoing tensions.
Key obstacles to a resolution have centered around pricing, with Iraq’s oil ministry proposing a production cost of $16 per barrel for approximately 185,000 barrels per day. However, this pricing strategy faced opposition from foreign oil companies associated with the Kurdistan region. Earlier promises from Baghdad to extend this pricing to all production had not been upheld following discussions with oil firms.
The U.S. official’s involvement was seen as a strategic move to facilitate negotiations and seek common ground among the involved parties. A ministry source noted that the U.S. aims to facilitate an outcome satisfactory to all stakeholders involved. The administration seeks to revive oil flows not only to stabilize global supply but also to minimize financial exchanges between Iraq and Iran amid heightened sanctions pressure.
Iraq, an essential U.S. ally, balances its relations with both Washington and Tehran, mindful of the potential fallout from intensified U.S. policies targeting Iran. As this complex situation evolves, the potential for further negotiations remains, though the underlying tensions persist.
The recent oil export talks between Iraq and Turkish authorities ended without resolution, primarily due to pricing disagreements, marking a continuation of a two-year standstill. U.S. diplomatic involvement signifies heightened international interest in resuming these exports, both for economic stability and to limit Iraq’s financial connections to Iran. The outcomes of future negotiations remain uncertain, as regional dynamics continue to influence discussions.
Original Source: www.marketscreener.com
