Iraqi Kurdish oil pipeline seen shut for two more weeks
ISTANBUL/ANKARA-ReutersIraqi Kurdish oil exports to world markets will remain halted for at least another two weeks, Turkish shipping and industry sources said Feb. 26, as security threats to the pipeline in Turkey’s southeast have significantly increased.
The outage, one of the longest in the past two years, is a major blow to the Kurdistan Regional Government (KRG), which depends on revenue from oil exports via the pipeline and is struggling to avert economic collapse brought on by the slump in energy prices.
The cost of the outage is calculated at more than $14 million a day.
It also highlights how intertwined the KRG’s economic woes are with the deteriorating security in the region.
The interruption is also bad news for European refiners which have been snapping up relatively cheap Kurdish barrels over the past year, boosting profits amid the embarrassment of riches in oversupplied market.
Carrying around 600,000 barrels per day (bpd) of crude to Turkey’s Mediterranean port of Ceyhan from fields in Iraq’s Kurdish region and Kirkuk, the pipeline has been offline since Feb. 17.
“The physical repairs of the pipeline will not take a long time. However, the work to fully restore the security of the pipeline will take more time. We think that it will take two weeks at least,” one Turkish industry source said.
Turkish energy officials have declined to comment on the issue.