Kurdish crude oil is poised to gain acceptance after the semi-autonomous region delivered a cargo and received a payment, according to Deutsche Bank AG.
“We expect trading houses to become increasingly comfortable handling Kurdistan Region of Iraq crude and steady-state exports to emerge,” analysts led by Lucas Herrmann wrote in an e-mailed report dated today.
The Kurdistan Regional Government started to export crude to Turkey’s Mediterranean port of Ceyhan through its own pipeline last month, without approval from Iraq’s central government. Four tankers have so far loaded cargoes of Kurdish crude in Ceyhan, with one shipment sold, according to Turkish Energy Minister Taner Yildiz.
Turkey’s Turkiye Halk Bankasi AS, or Halkbank, received $93 million for a shipment, Yildiz said on June 23. The destination of the crude isn’t of interest to Turkey, the minister said.
“Despite regional conflict and the threat of legal action from Baghdad, significant milestones have been achieved,” Hermann said.
Iraq’s government has warned that it will prosecute any buyers of the Kurdish oil and sought arbitration at the International Chamber of Commerce. The Kurdistan Regional Government says it’s abiding by the Iraqi constitution.
The Kurdistan Regional Government controls 45 billion barrels of oil reserves, according to its estimates.
To contact the reporter on this story: Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Rachel Graham, James Herron