Negotiations to resume Iraqi oil exports to Turkey have failed twice this week over pricing issues. A U.S. diplomat attended the talks for the first time amid pressure from the Trump administration for Iraq to restart exports. Baghdad’s insistence on a specific production cost and subsequent backtracking created significant tensions with foreign oil companies involved in the Kurdish region.
Recent negotiations concerning the resumption of Iraqi oil exports to Turkey ended without a resolution, marking the second failure in a week. These discussions, held in Baghdad at the oil ministry’s headquarters, addressed a two-year suspension of oil flows from Iraqi Kurdistan to Turkey’s Ceyhan port. Notably, a U.S. diplomat was present for the first time, as Washington continues to exert pressure on Iraq to allow exports to restart under the threat of potential sanctions from the Trump administration.
The negotiations focused primarily on pricing issues, with Baghdad insisting on a cost of $16 per barrel for the 185,000 barrels per day slated for export. However, this price was proposed only for certain production volumes, which foreign oil companies operating in Kurdistan rejected. Companies like DNO, Genel Energy, and Gulf Keystone Petroleum are active in this region’s oil sector. Previously, Baghdad had assured that this pricing would apply to all production, but later decisions indicated otherwise.
The U.S. official’s presence at these negotiations was a strategic move by Washington aimed at advancing discussions and reaching an agreement that aligns with the interests of all stakeholders. As articulated by an Iraqi oil ministry representative, the objective is to foster progress in the negotiations, satisfying all involved parties. Furthermore, the U.S. aims to bolster global oil supply while diminishing Iraq’s financial connections to Iran amid heightened tensions surrounding Tehran’s nuclear program and oil exports.
Iraq’s geopolitical significance remains critical, given its relationships with both the U.S. and Iran. However, Baghdad seeks to navigate these pressures without becoming a focal point of escalating tensions between the two powers.
In summary, recent talks regarding the resumption of Iraqi oil exports to Turkey concluded without a satisfactory agreement, due primarily to pricing disputes. The involvement of a U.S. diplomat signifies a notable attempt by Washington to influence the negotiations, highlighting the importance of Iraqi oil in broader geopolitical contexts. This situation illustrates the delicate balance Iraq must maintain as it interacts with both the U.S. and Iran amidst ongoing international pressures.
Original Source: www.marketscreener.com
