Recent discussions aimed at resuming Iraqi oil exports to Turkey concluded without a deal for the second time in one week, primarily due to disputes over pricing and payment. A U.S. diplomat attended the talks, reflecting pressure from Washington to resolve the stalemate, which is part of a strategic effort to curb Iran’s influence in the region.
On March 6, 2023, negotiations to resume Iraqi oil exports to Turkey concluded without an agreement, marking the second unsuccessful attempt within a week. The ongoing halt in oil flow from Iraqi Kurdistan to Turkey’s Ceyhan port has persisted for two years. U.S. diplomatic presence was notable, as an official from the U.S. Embassy in Baghdad attended the talks for the first time, aiming to facilitate progress.
The U.S. government is exerting pressure on Iraq to restart these exports, with the Trump administration reportedly threatening sanctions if compliance is not met. This demand aligns with America’s broader strategy of exerting pressure on Iran by restricting its oil revenue. At the heart of the recent discussions was a dispute over oil pricing, particularly the Iraqi Oil Ministry’s insistence on a production cost of $16 per barrel for approximately 185,000 barrels per day. This pricing was contested by foreign oil enterprises involved in Kurdistan’s oil production.
Sources informed that Baghdad had previously assured that this price would apply to all production but reversed this commitment during a recent meeting with oil companies. The U.S. representative’s attendance underscored Washington’s determination to mediate effectively in the negotiations, with officials highlighting the need for satisfactory solutions for all parties involved. Washington aims to resume oil flows to augment global supply and stabilize prices, while simultaneously aiming to diminish any financial dependency of Iraq on Tehran amid high-stakes geopolitical tensions.
It is crucial for Iraq to navigate these discussions delicately. The country finds itself in a challenging position as it balances its relationships with both the United States and Iran, each holding significant influence over its economic stability and international standing. Balance is essential, given the competing demands placed upon Baghdad within the broader regional context.
In summary, recent talks to resume Iraqi oil exports to Turkey have been unsuccessful due to disagreements over pricing and payment terms. The involvement of a U.S. diplomat for the first time underscores the significance placed on resolving these issues amid broader geopolitical tensions. Iraq’s ability to navigate relationships with both the United States and Iran is critical for its economic future amid the constraints imposed by external pressures.
Original Source: www.marketscreener.com
