two hours ago
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A report by a London-based think tank says the damage caused by the suspension of Kurdistan's oil exports through Turkey is far greater than can be estimated in terms of money.
According to a report issued by the International Center for Development Studies in London, stopping the export of Kurdistan's oil has decisive consequences and limits Iraq's ability and causes great damage.
The Kurdistan region's oil exports represent about 14 percent of Iraq's total exports, as OPEC has now reduced Iraq's production to an average of 3.5 million barrels per day, while Iraq has the capacity to produce about five million barrels per day.
The Iraqi government has since said it is in talks with Turkey to resume oil exports from Kurdistan, but Turkey has yet to open the way, raising suspicions.
The dispute between the government and members of the Finance Committee in the House of Representatives over amending the budget law will undermine the oil agreement between the Kurdistan Region and Baghdad, which the Prime Minister described as a “great and historic agreement.”
The report says that there are international fears of a possible recession, in addition to the slowdown in global economic activity with high inflation and low global demand, which prompted OPEC Plus to cut oil production by the end of this year.
All of these moves led to a decrease of about $490 million in Iraq's financial revenues in May, compared to $7.796 billion in April.
Iraq is trying to increase its oil production in the south of the country, and the Basra Oil Company is working to pump large amounts of water into its oil fields to help increase the pressure on the oil wells….
Basra plans to build a third pipeline to the ports, but there is no guarantee yet that the huge amount required will be available.
The report said that the resumption of oil exports from the Kurdistan region will help reduce the financial deficit in the Iraqi budget and prevent further waste of revenues.
These revenues can contribute to improving the infrastructure of the oil industry in increasing Kurdistan's oil exports to reach one million barrels per day by 2026, which raises the total Iraqi oil export capacity to seven million barrels per day.
Iraq sued Turkey in the International Court of Arbitration over the Kurdistan oil issue and won, but Turkey has since refused to allow oil exports to resume on the basis of last winter's earthquake, claiming that the pipeline was damaged.
According to the court, Turkey should have paid Iraq $1.5 billion in compensation for exporting oil from the Kurdistan region for a period of 10 years, but it has been blocking the road for two months, causing damage worth $2.4 billion to the Iraqi economy.
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