Iraq will halt trucking oil to Iran from the northern Kirkuk oilfield in November to comply with upcoming US sanctions, five sources familiar with Iraqi oil export operations told Reuters on Friday.
"Kirkuk oil trucking to Iran will be halted in November in line with the American sanctions against Iran. (State oil marketer) SOMO plans to sell 30,000 bpd from a small oilfield near Mosul as of November as an alternative. SOMO issued the tender on Thursday," one source said, Asharq Al-Awsat reports.
Kirkuk is one of the biggest and oldest oilfields in the Middle East. Last year Iraq began to ship crude from Kirkuk to Iran for use in its refineries, and Iran agreed to deliver the same amount of oil to Iraq's southern port.
Currently, Iraq is exporting less than 30,000 barrels per day (bpd) to Iran via truck, the sources told Reuters.
President Donald Trump's decision to withdraw the United States from a 2015 international nuclear accord with Tehran in May and reimpose sanctions has put Iraqi Prime Minister Adel Abdul Mahdi's incoming government in a difficult position as the country's economy is closely intertwined with neighboring Iran.
Abdul Mahdi said on Thursday that Iraq would prioritize its own interests and independence when it comes to helping the US enforce the sanctions but Washington has said there will be consequences for countries that do not respect the sanctions.
"The US has been putting pressure on Iraq to suspend shipments of oil to Iran and to resume Kurdish oil flows towards Turkey. If Turkey gets more oil from Iraq, it will be more difficult for Ankara to argue it needs a US waiver to continue buying Iranian oil," a source familiar with Iraqi oil export operations told Reuters.
Former prime minister Haidar al-Abadi's outgoing federal government agreed a deal in mid-October with the Kurdistan Regional Government (KRG) to resume exporting crude to Turkey's Ceyhan port via the KRG, the sources said.
The deal is subject to final approval by Abdul Mahdi and Oil Minister Thamer Ghadhban, they added.
"Kurdish authorities reached a deal with Abadi's government to resume Kirkuk exports and it was decided that the final say should be left to the new government and oil minister to sign a final deal," one source said.
Two oil officials with the North Oil Company (NOC) confirmed to Reuters that the federal government and the KRG had reached a deal but that Abdul Mahdi's signature is needed before it becomes final.
