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The Iraqi Minister of Oil, Hayan Abdul-Ghani, highlighted on Monday the need to increase Iraq’s oil export outlets by developing projects that improve export capacity and allow greater flexibility in exceptional scenarios.
Abdul-Ghani’s remarks took place during a meeting of the ministry’s Advisory Board, when he stressed the importance of expanding and maintaining the country’s export capability, which serves as the principal source of revenue for the state budget, Al-Arabiya News reported.
Since crude oil supplies through the Turkish port of Ceyhan were stopped, Iraq’s crude oil exports have been limited for years to the Arabian Gulf’s primary outlets in the southern part of the country.
The federal government in Baghdad and the Kurdistan Regional Government (KRG) were at odds over financial returns, marketing strategies, and how to settle disputes with foreign oil corporations operating in Iraqi Kurdistan.
If the regional conflict increases, Iran blocks international shipping through the Strait of Hormuz, and Iraq stops exporting its crude oil at a pace of more than 3.2 million barrels per day, Iraq will be in serious danger.
Iraq’s integrated national energy strategy for 2013–2030 called for increasing its crude oil exports to 3.75 million barrels per day through ports on the Mediterranean and the Red Sea via a pipeline infrastructure that passes via Syria, Turkey, and Jordan. Nevertheless, the financial circumstances in Iraq hindered the implementation of these objectives.
Iraq may stop exporting its oil to international markets, especially those in Asia, where it makes up around 70 percent of all oil exports, especially to China and India, as a result of the region’s growing dangers, which include threats to block the Strait of Hormuz. Given that more than 90 percent of Iraq’s annual federal budget needs are met by oil export earnings, this would put the country at risk of a serious financial disaster.
