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From challenges to collaborations: IRAQ-TURKIYE relations in focus

Iraq and Turkiye's relationship spans a spectrum of challenges and collaborations, from addressing security concerns related to the PKK to fostering robust trade ties and navigating complexities in the oil and water sectors. This report sets the stage for a closer examination of the multifaceted dynamics shaping their bilateral interactions. Turkiye's Military Operations And Iraq's Evolving Response The Turkish Armed Forces have been conducting cross-border military operations against the Kurdistan Workers' Party (PKK) since the 1980s. The PKK maintains bases in the mountainous areas of northern Iraq near the Turkish border. This proximity allows them to launch attacks into Turkiye. In contrast, the Turkish army has established several military bases at strategic points in the Matin mountain range in Iraqi Kurdistan, citing the expulsion of Kurdistan Workers' Party militants as justification. In July 2015, a two-and-a-half year-long ceasefire broke down, and the conflict between Ankara and militants of the PKK – recognized as a terrorist organization by Turkiye, the U.S., and the European Union – entered one of its deadliest chapters in nearly four decades. Since that date, the conflict has progressed through several phases. Between roughly 2015 and 2017, the violence devastated communities in some urban centers of Turkiye's majority Kurdish southeast and – at times – struck into the heart of the country's largest metropolitan centers. From 2017 onward, the fighting moved into rural areas of Turkiye's southeast. As the Turkish military pushed more militants out of Turkiye, by 2019, the conflict's concentration shifted to northern Iraq and northern Syria. In 2020, the first mission triggered a series of subsequent operations with similar names and methods of execution, each justified differently. Between June and September 2020, Ankara launched Operation Claw Eagle and Claw Tiger, characterized by airstrikes carried out by aircraft and drones targeting PKK positions in Mount Sinjar. Additionally, ground operations were conducted in Haftanin (Zakho District of Duhok) against Kurdish guerrilla forces. In April 2021, the Turkish army launched Claw-Lightning and Claw-Thunderbolt operations along the Iraq-Turkiye border near Metina, Zap, and Avashin-Basyan. In April 2022, Ankara commenced Operation Claw-Lock in northern Iraq, establishing several bases in Duhok Governorate. Iraq views Turkish airstrikes and bases as a violation of its sovereignty and territorial integrity. These operations commonly cause civilian casualties and damage infrastructure alongside the killing of PKK members. The Iraqi government also worries that Turkish military presence in northern Iraq could destabilize the Region and empower Kurdish separatists within Iraq. The PKK conflict, spanning about four decades, has been a persistent challenge, with Turkiye expressing disappointment in the Iraqi government's historical "reluctance" to acknowledge and ban the PKK as a terrorist organization. However, recent developments have signaled a shift in Iraq's stance. Last March, Turkiye proposed the establishment of a "joint operation center" with Iraq to combat the Kurdistan Workers' Party (PKK), a move that has received a positive response from Baghdad. Previously, a high-level Turkish delegation, including Foreign Minister Hakan Fidan, Defense Minister Yasar Guler, and National Intelligence Organization (MIT) head Ibrahim Kalin, visited Baghdad for a top security meeting with Iraqi counterparts. This meeting marked the second round of discussions, with the first round held in Ankara in December. During a press conference in Ankara, Brigadier General Zeki Akturk, the Turkish defense ministry's media, and public relations advisor stated that Iraq and Turkiye are ready to sign a strategic framework document. This document aims to establish a joint operations center as part of Ankara's efforts to combat terrorism. "Both countries are positively inclined towards our proposals for the Joint Operations Center and other cooperation efforts in combating terrorism," said Akturk. He also noted that Iraq recognizes the PKK as a threat. According to a Turkish defense ministry official, the proposal aims to enhance cooperation in addressing the PKK's activities along the Iraq-Turkiye border. Following the high-level talks, Iraq announced the designation of the PKK as a "banned organization." Moreover, the Kurdistan Region is always confirmed to turn the Region into a source of conflict with neighboring countries. In a TV interview last February, the President of Kurdistan Region, Nechirvan Barzani, was asked if Turkiye coordinates with Erbil when launching strikes against PKK in the Region; Barzani explained, "The (Kurdistan) Workers' Party is a severe headache for the Kurdistan Region and Iraq as well. They do not value the legitimacy of the Kurdistan Region's institutions and threaten Turkiye from our territories. While we completely reject the principle of turning the lands of the Kurdistan Region into a source of threat to our neighbors, whether this neighbor is Turkiye or Iran." He rejected that PKK, as opponents of Tehran and Ankara, "make the Kurdistan Region a safe area to create problems for these countries. It is regrettable that the PKK plays a very negative role in this context and uses the mountainous areas of the Kurdistan Region and tries to create problems for Turkiye. This is absolutely unacceptable from our side." Iraq-Turkiye's Growing Economic Partnership Iraq and Turkiye have a long history of trade relations; Turkiye's most important exports to Iraq include chemicals and products, the oilseed sector and its derivatives, grains and legumes, furniture, paper and forest products, the construction sector, and medicines. On the other hand, Iraq's most important exports to Turkiye are mainly oil. On Saturday, the Turkish Ministry of Trade revealed that Turkish exports to Iraq would soon increase to $15 billion and $20 billion by 2030. Turkish Minister of Trade Omer Polat told Anadolu Agency that "Iraq has always been one of the most important countries for Turkiye in terms of trade and economic relations," noting that "Iraq's share of Turkish exports over the past ten years exceeded 5% of the country's total exports." Polat clarified that "Turkish exports to Iraq encompassed most sectors, with the trade volume between the two countries reaching $24.2 billion in 2022 and $19.9 billion last year." "Our exports to Iraq decreased by 7.2% compared to the previous year, reaching $12.8 billion, while our imports from Iraq decreased by 31.1% to approximately $7.2 billion during the same period. Our foreign trade surplus was $5.6 billion last year." Polat emphasized that "exports increased by 24.5% during the first three months of 2024 compared to the same period last year, reaching $3.4 billion, while imports decreased by 46.2% to $835 million." The Turkish Minister of Trade concluded by indicating that "Turkish exports to Iraq are poised to reach $15 billion soon and $20 billion by 2030, with the completion of the Development Road project." Oil Diplomacy: Tensions And Renewed Efforts In Iraq-Turkiye Energy Relations The energy dynamics between Iraq and Turkiye have played a pivotal role in their diplomatic ties, given Turkiye's energy consumption and reliance on imports, primarily from hydrocarbons, due to limited domestic resources. Iraq, particularly the Kurdistan Region of Iraq (KRI), has emerged as a crucial partner for Turkiye, particularly in oil and gas reserves. Over the years, Turkiye has become a key strategic ally for the KRI, facilitating the export of approximately 500 thousand barrels per day (mb/d) of oil through the Ceyhan port. However, tensions escalated in March 2022 when Turkiye halted oil exports amounting to 450,000 bpd from Kurdistan following a compensation order by the International Chamber of Commerce related to "unauthorized" oil exports by the KRG between 2014 and 2018. The crux of the dispute revolves around accusations that Turkiye breached a 50-year-old pipeline transit agreement by allowing oil exports from KRG-controlled areas without Iraq's consent. Baghdad contends that Ankara and the Turkish state energy company BOTAS violated the terms of a 1973 Iraq-Turkiye pipeline agreement by handling oil from Kurdistan without official approval. Iraq asserts that only the state-owned marketer SOMO has the authority to manage crude exports via Ceyhan. While most of Iraq's crude exports pass through southern ports, the northern route via Turkiye still contributes around 0.5% of the global oil supply. The halt in exports contributed to the oil barrel to reach 80$ at that time. During a visit to Erbil in November 2023, Iraqi oil minister Hayan Abdel-Ghani expressed optimism about reaching an agreement with the KRG and foreign oil companies to resume oil production from Kurdish oilfields. Despite Turkiye's prior announcement that the pipeline was ready to operate, Iraq maintained that it had yet to receive official notification and highlighted unresolved financial and technical issues. However, recent discussions between the Iraqi PM Mohammed Shia Al-Sudani and U.S. President Joe Biden emphasized the importance of ensuring Iraqi oil reaches international markets, signaling a renewed effort to reopen the pipeline between Iraq and Turkiye. In response, the Association of the Petroleum Industry of Kurdistan (APIKUR) expressed readiness to engage in discussions with Iraqi and KRG officials to resume oil exports, stressing the need for guarantees regarding financial obligations per existing agreements. Water Crisis: Turkiye's Dams And Iraq's Droughts The water problem between Iraq and Turkiye primarily revolves around the flow of the Tigris and Euphrates rivers, which originate in Turkiye and flow through Syria and Iraq. The construction of dams and large irrigation systems by Turkiye has led to a massive reduction in water flow into Iraq by 30-40%, causing droughts and water shortages. In addition, Turkiye's Southeastern Anatolia Project (GAP) and the Ilısu Dam project are particularly contentious. They have resulted in a 40% cut in water flows into Syria and Iraq, impacting agriculture, energy production, and the overall water supply in these countries. This reduction in water flow has been a major source of tension between the two countries, with Turkiye's projects leading to droughts in Iraq and exacerbating the water shortage crisis in the Region.

The Iraqi Commission set the date of the Kurdistan election campaign

A spokeswoman for the Iraqi Election Commission said “May 10 is the date set for the start of the campaign for the Kurdistan parliamentary elections and the final decision is up to the council of commissioners". Jumana Ghalay added: The Iraqi High Election Commission announced that May 10 will be the start of the party's, lists and independent candidates’ campaign for the upcoming Kurdistan parliamentary elections and will last 28 days. She added that the election campaign of political parties and coalitions would be suspended 24 hours before the special vote and 48 hours before the general vote

Iraq’s external debt reduced to $9 billion

The Iraqi government revealed that it succeeded in reducing external debt by more than 50 percent from the end of 2022 until 2024. The spokesperson for the Iraqi government, Basem Al-Awadi, said that the external debt decreased to about $9 billion in 2024, compared to $19.72 billion in 2022, according to the Iraqi News Agency (INA). Al-Awadi said in a statement that the government adopted several executive actions and approved a set of financial choices, resulting in a more than 50 percent reduction in the external debt, which dropped to about $8.9 billion in 2024. The Iraqi official explained that the government took steps such as restructuring certain debts and directing them to be used for important initiatives, in addition to canceling loans that were unproductive. Al-Awadi pointed out that the government provided sovereign guarantees to assure the completion of private sector initiatives carried out for the government’s benefit but only permitted financial cooperation with other countries in specific circumstances, such as direct productive borrowing.

Iraq will reopen the Kirkuk–Ceyhan Oil Pipeline by the end of this month

A senior Iraqi official in the oil sector revealed that Baghdad is working on repairing a pipeline that might enable it to transfer 350,000 barrels per day to Turkey by the end of the month. This development is expected to enrage international oil companies as well as the Kurdistan Regional Government (KRG), according to Reuters. Reopening the ten-year-old Kirkuk-Ceyhan pipeline would offer an alternative route to the Kurdistan region’s pipeline, which has been closed for a year due to an impasse in discussions between Baghdad and the KRG over the resumption of oil exports. Production-sharing agreements between Iraqi Kurdistan and international corporations utilizing the KRG pipeline are unlawful in Baghdad’s eyes. Oil firms will have to negotiate with the federal government in Baghdad to export their oil to Turkey through the reopened pipeline, which might infuriate the KRG, which depends on oil revenues. The 960-kilometer (600-mile) pipeline’s exports were stopped in 2014 as a result of several attacks by ISIS terrorists. The pipeline used to handle 0.5 percent of the world’s supply. The deputy oil minister for upstream affairs, Basim Mohammed, told Reuters that although repair work is still proceeding, a large crude pumping station with storage facilities has been finished. Mohammed noted that the pipeline should be operational and ready to resume flows by the end of April. Turkey stopped Iraq’s exports of 450,000 barrels per day through the oil pipeline that extends from the Kurdistan region of Iraq to the Turkish port of Ceyhan on March 25, 2023. Turkey’s decision to suspend oil exports followed an arbitration decision issued by the International Chamber of Commerce (ICC) in Paris. The decision obliged Turkey to pay Baghdad $1.5 billion in compensation for damages caused by the KRG’s export of oil without permission from the federal government in Baghdad between 2014 and 2018. The KRG began exporting crude oil independently in 2013, a step Baghdad considered illegal.

Iraqi Chief Justice invites UNAMI to play a role in resolving the obstacles to holding the parliamentary elections in the KRI

The head of Iraq's Federal Supreme Court, Jassim Mohammed Aboud, on Sunday called on the United Nations Assistance Mission for Iraq (UNAMI) to play a role in resolving the obstacles to holding the parliamentary elections in the Kurdistan Region, which he described as a "federal region" citing article 117 of the Iraqi constitution. A statement from the council's media office said that "the Chief Justice, Judge Jassim Mohammed Aboud, received today the Special Representative of the United Nations Secretary-General in Iraq, Jeanine Hennis-Plasschaert, and her accompanying delegation at the headquarters of the council in Baghdad." During the meeting, the role of the United Nations Assistance Mission for Iraq (UNAMI) from 2003 until the present was discussed, and the issue of the decision issued by the Federal Supreme Court regarding the localization of the salaries of retirees, employees, and beneficiaries of the social protection network was discussed based on a lawsuit filed by employees in the region and the impact of that. The decision to distribute salaries to the segments mentioned above during this week in the Kurdistan region of Iraq, as the reason for this is the presence of problems between the federal government and the regional government regarding the implementation of the budget law, and the court stated in its decision that this should not be a reason for depriving employees and retirees in the region of their monthly salaries and must to be treated the same as other employees in all governorates in order to achieve the principle of equality. The President of the Federal Supreme Court explained that the Constitution of the Republic of Iraq, in accordance with Article (117), recognized the Iraqi Kurdistan region and its existing authorities as a federal region, and the authorities of the region, in accordance with Article (121/First) of this Constitution, have the right to exercise legislative, executive, and judicial powers in accordance with the provisions of this Constitution, with the exception of what is stated therein. It is the exclusive jurisdiction of the federal authorities. He pointed out that the Federal Supreme Court does not consider cases on its own, but rather based on lawsuits brought before it by plaintiffs, and that the court must resolve those lawsuits in accordance with the Constitution and the law. He pointed out that the United Nations Mission in Iraq must have a role in resolving obstacles facing holding elections for the parliament of the Kurdistan region of Iraq.

Iraq to stablish Wasit Oil Company

The Wasit Oil Company's establishment work was confirmed on Thursday by Hayyan Abdul Ghani, the Deputy Prime Minister for Energy Affairs and Minister of Oil. He also mentioned that international companies have been invited to develop three fields and exploratory spots in Wasit Governorate. "Deputy Prime Minister for Energy Affairs and Oil Minister Hayyan Abdul Ghani arrived in Wasit province and met with its governor, Muhammad Jamil al-Mayahi, and members of the government and local departments in the province," reads a statement from the Ministry of Oil. "Wasit province gains government attention and support, and we are keen to communicate with the local government and with the governor to advance the service reality and develop the oil industry," the oil minister reportedly stated in the statement. He emphasized "work to establish the Wasit Oil Company" and noted that "issues and projects of common interest were discussed to advance the service reality and the development of the oil industry in the province." "International companies were invited to develop three fields and exploratory spots in Wasit province as part of the fifth complementary oil licensing round," he said, pointing out that "specialized companies were invited to participate in investment opportunities to build the Wasit investment refinery." Noting that "allocations of social benefits have been increased to support the service and health sectors for citizens," the oil minister placed emphasis on "working to develop the distribution sector and promote the service reality in the province."

Iraq tightens grip on autonomous Kurdish region

AFP Iraq is using a period of relative stability to assert more control over the autonomous Kurdistan region that has long had fraught relations with federal authorities, analysts and politicians say. Long-simmering disputes between Baghdad and Irbil, the capital of the northern region, came to a head recently after several Supreme Court rulings that the Kurds saw as an attempt to weaken the region’s autonomy. Regional Prime Minister Masrour Barzani warned last week of “conspiracies aimed at undermining and dismantling the Kurdistan region” with “internal support within Kurdistan.” The pressure is aimed at Barzani’s Kurdistan Democratic Party or KDP, which has been locked in a never-ending rivalry with the other main party, the Patriotic Union of Kurdistan or PUK. Kurds in Iraq were persecuted under the Sunni Arab-dominated regime of the late dictator Saddam Hussein but the 2005 constitution formalized their autonomy after the 2003 US-led invasion that toppled Saddam. But mending the volatile ties between the central government in Baghdad and Kurdistan has been a persistent challenge. Consecutive federal governments have long been preoccupied with “crises and complex challenges,” said a senior official in Baghdad about years of war, the fight against the Daesh group, and anti-government protests. “That is why they never looked into Kurdistan’s mistakes ... (such as) oil deals and exports, the region’s financial system, and several illegal decisions that have been made,” he added. But, he added: “Now is the time to fix these mistakes.” Despite facing the same problems as Baghdad, such as endemic corruption, fractious politics, and entrenched ruling elites, the US-backed Kurdistan region has portrayed itself as a hub of stability and economic growth in contrast to the conflicts and crises that have besieged federal Iraq. Last year, civil servants and lawyers from the city of Sulaimaniyah, the PUK stronghold, had taken the regional and national authorities to court over unpaid salaries in Kurdistan, where officials have long accused Baghdad of not sending the necessary funds. In February, the Federal Supreme Court in Baghdad ordered the federal government to pay public sector salaries in Kurdistan directly instead of via the regional administration under a previous long-standing arrangement. It also demanded that Irbil hand over all “oil and non-oil revenues” to Baghdad. In a separate case, the court ruled to reduce the number of seats in the Kurdish parliament from 111 to 100, effectively eliminating a quota reserved for Turkmen, Armenian, and Christian minorities. In response, Barzani’s KDP, the largest party in the outgoing parliament with 45 seats against 21 for the PUK, said it would boycott legislative polls due to take place in June. The tussle with the federal court has aggravated an already tense disagreement over oil exports. In March 2023, the federal government won international arbitration, recognizing its right to control Kurdish oil exports through Turkiye. The ruling led to the suspension of exports, which blocked a significant source of income for the regional administration. Irbil later agreed in principle that sales of Kurdish oil would pass through Baghdad in exchange for 12.6 percent of Iraq’s public spending, but the agreement’s implementation has stalled. When Prime Minister Mohammed Shia Al-Sudani first came to power in 2021, Baghdad and Irbil enjoyed better relations than they had seen in years. But experts say that some parties that brought Al-Sudani to power are now determined to weaken the autonomous Kurdistan region. “Some politicians desire to undermine the constitutional state of the Kurdistan region out of political vengeance,” said Ihsan Al-Shammari, a political scientist at the University of Baghdad. Although court decisions concerning Kurdistan are “constitutional,” they are “political,” Al-Shammari said. The recent tension undermines Irbil’s relationship with Baghdad and aims to “politically” weaken the KDP, Al-Shammari added. Political bickering between the KDP and its main rival, the PUK, which enjoys friendlier ties with the federal government, has always shaped politics in the autonomous region. PUK chief Bafel Jalal Talabani announced his support for the Supreme Court’s decisions — an institution he said helped “protect the political system in Iraq.” But Sabah Sobhi, a KDP lawmaker, said the decisions undermined Iraq’s current political system. He said some political parties wanted to replace “the federal and decentralized” system with a “centralized and authoritarian” rule. “Disagreements among Kurds would undoubtedly” worsen the situation, Sobhi warned.

Iraqi Ministry of Finance releases salaries for KRI's security personnel

The Federal Ministry of Finance announced, on Wednesday, the disbursement of salaries for security personnel in the Kurdistan Region (KRI) for February. According to a statement from the ministry, "the Accounting Department within the ministry initiated the funding for the remaining salaries of security personnel in the Region for the month of February." "This action follows the procedures outlined by the Ministry of Finance for financing the Region's salaries per the decision of the Federal Court." "The funding was released based on the Ministry of Finance Accounting Department's letter numbered 9133 dated April 3, 2024, after fulfilling all the required procedures for financing the salaries of federal government employees." Notably, on February 21, the Federal Supreme Court, the highest judicial authority in Iraq, decided to obligate both Prime Ministers Mohammed Shia Al-Sudani and Masrour Barzani to localize the salaries of employees and workers in the public sector at federal banks. The Court's new decision has sparked anger and criticism among Kurdish politicians, with some claiming that the decision is unconstitutional and politically motivated and that it undermines the autonomy and finances of the Kurdistan Region. However, some observers and experts argue that the decisions are correct and consistent with the law and the constitution and will ensure everyone's rights and end the suffering of the Region's employees.

Iraq And Iran Will Expedite Development Of Sanctions-Busting Shared Oil Fields

A key reason why oil prices have remained relatively subdued despite the ongoing Russia-Ukraine and Israel-Hamas wars is that Iran has been producing much more oil than widely known, with the tacit agreement of the U.S. This acquiescence stems from the White House’s desire to avoid the sort of surging energy prices that caused inflation and interest rates to spike in it and its key allies in the aftermath of the Russian invasion of Ukraine in 2022, risking economic recessions in several of them. It also comes from the political awareness that rising oil prices cause gasoline prices to rise as well, and this directly affects a sitting U.S. president’s chances of re-election, as analysed in full in my new book on the new global oil market order. This massive additional quantity of oil from Iran over and above the official figures has gone to China for a basic discount of 30 percent minimum to the relevant grade benchmarks, which has reduced China’s demand for oil in the open market and has consequently acted as a dampening factor on global oil prices. The reason why it does not show up in any official figures is that these ‘unofficial’ oil flows from Iran are held by China in ‘bonded storage’, and oil that goes into bonded storage is not put through China’s General Administration of Customs (GAC) – it is not even recorded as having been ‘paid for’ - and consequently does not appear on any GAC documentation. Much of these unofficial flows have come from increases in the oil fields shared between Iran and Iraq, so it is little wonder that both countries are working now to dramatically increase these further. There are many shared fields between the two countries, but the most notable ones are Azadegan (on the Iran side)/Majnoon (on the Iraq side), Azar (Iran)/Badra (Iraq), Yadavaran (Iran)/Sinbad (Iraq), Naft Shahr (Iran)/Naft Khana (Iraq), Dehloran (Iran)/Abu Ghurab (Iraq), West Paydar (Iran)/Fakka/Fauqa (Iraq), and Arvand (Iran)/South Abu Ghurab (Iraq). The new development initiative between Iran and Iraq will see predominantly local companies, many of which are closely affiliated to Iran’s Islamic Revolutionary Guard Corps (IRGC) or its Iraqi proxies, tasked with increasing the oil recovery yield from the smaller shared fields, while Russian and Chinese companies take the lead on the bigger fields. The idea behind using the local firms for the smaller fields is to allow them to develop their oil recovery techniques (with help from Russia and China) so that they can consistently average more than the 3.5 percent recovery rates that they have so far managed on sites they have been assigned. Just before sanctions were re-introduced on Iran in 2018, by comparison, a well-known Western oil firm produced a feasible plan to increase the recovery rates on a group of these smaller fields to over 12.5 percent within 12 months from starting (from the then-2.5 percent average), 20 percent a year after that, and then to around 50 percent within three years from then. The hope in Iran’s Petroleum Ministry is that by increasing the technical abilities of these local companies, they can be increasingly involved with developing the bigger fields, which would enable the Islamic Republic to reduce the discount on oil sold to China as part of the overall field development packages signed with its companies. The same hope is held for the bigger fields too, and the financial potential from even relatively small increases in the oil recovery rate are massive. Looking at just the shared fields in the exceptionally oil-rich cluster of fields in the West Karoun area - which comprises the fields of North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran, for example - these are conservatively estimated to contain at least 67 billion barrels of oil in place and, even more propitiously, have an average recovery rate currently of just 5 percent. This compares to average recovery rate across Saudi Arabia of at least 50 percent. “For every one percent increase in the average rate of recovery across West Karoun, the recoverable reserves figure would increase by 670 million barrels, or around US$34 billion in revenues, even if we were only to sell at US$50 a barrel,” the Iran source told OilPrice.com. “With the right joint development, an increase in recovery rate across the [West Karoun] sites to at least 25 percent over a 20-year contract period could be expected to add US$838 billion in revenues for Iran,” he added. Currently, West Karoun’s oil output averages around 360,000 barrels per day (bpd), with spikes to 380,000 bpd, compared to 120,000 bpd in 2017, according to the Iran source. A key part of the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and also analysed in full in my new book on the new global oil market order, was that Chinese firms increase the collective output from the West Karoun fields by at least 500,000 bpd. This should not be difficult, given that the average US$1-2 lifting cost per barrel of crude oil in Iran – a proxy for ease of extraction - is the same as in Saudi Arabia and Iraq. So far, though, no meaningful increases have been effected by Chinese firms, which may be another reason why Iran and Iraq want to increase the abilities of their own people in exploiting their enormous oil resources. The shared fields of Iran and Iraq have also been invaluable as the basis for Tehran’s highly successful efforts over the years to avoid oil sanctions from either the U.S. or Europe. The oil on the non-sanctioned Iraqi side of the border is often drilled from the same reservoirs as the oil drilled on the sanctioned Iranian side, sometimes even through long-distance horizontal directional drilling. Even if the Americans, Europeans, or any of their most trusted appointees stationed people at every single rig in every single shared field in Iraq they would not be able to tell if the oil coming out it was from the Iraq side or the Iranian side. So this has allowed for decades Iranian oil simply to be rebranded at source as Iraqi oil and shipped to wherever is required in the world. Other layers of complexity have been added to this to further obfuscate the true origin of the oil in question, as also analysed in full in my new book on the new global oil market order. One simple but very effective method is just to switch off a ship’s automatic identification systems (AIS) transponder, making the vessel much more difficult to track. Another involves simply lying about a ship’s final destination in the freight documentation and in the vessel’s voyage plan. This standard Iranian sanctions-avoidance measure was openly acknowledged in 2020 by its former Petroleum Minister, Bijan Zanganeh, when he said: “What we export is not under Iran’s name. The documents are changed over and over, as well as [the] specifications.” Additionally, transfers at sea in territorial waters of Malaysia and Indonesia have proven another popular way for Iran to move oil ultimately to China. As Iran’s then-Foreign Minister, Mohammad Zarif, stated in December 2018 at the Doha Forum: “If there is an art that we have perfected in Iran, [that] we can teach to others for a price, it is the art of evading sanctions.” In any event, following the recent meeting of Iran’s Petroleum Minister, Javad Owji, and his Iraqi counterpart, Hayan Abdel-Ghani, the development of these shared oil fields is to be expedited, with further meetings scheduled in the coming month to task individual local firms with new awards to do so. These discussions will also include finalising corollary details such as the further development of required infrastructure, methods to move money related to these developments, and how to monetise gas produced at the oil fields, according to the Iran source. By Simon Watkins for Oilprice.com

Iraq Is Yet to Amend Budget to Get Kurdish Oil Flowing Again

Oil Minister Hayyan Abdul Ghani said that the Iraqi government is still studying a proposed amendment to the federal budget that would enable Baghdad to pay international oil companies working in the Kurdistan region. The change would allow producers in the semi-autonomous region to resume output — and eventually exports via the Turkish port of Ceyhan. Turkey shut the pipeline bringing crude from Kurdistan last March, and that’s resulted in billions of dollars of lost revenue for the governments and companies involved. A key hurdle to restarting flows is the production cost of Kurdish oil. Prime Minister Mohammed Shia Al-Sudani in December put that cost at $21 a barrel, compared with just $8 in other regions of Iraq. “We seek to accelerate the settlement of the cost issue and resume exports as soon as possible,” Bloomberg quoted the Minister. The Oil Ministry hopes to review and amend contracts signed between the Kurdistan Regional Government and the international companies, he said. Turkiye closed the pipeline after an arbitration court ordered it to pay Iraq $1.5 billion in compensation for transporting oil through the link without Baghdad’s approval. Ankara, which claimed the pipe was shut for repairs, said in October it was ready for operations and it was up to Iraq to resume flows. Turkish President Recep Tayyip Erdogan is due to visit Baghdad next month, which may help resolve other sticking points, including the fine. Abdul Ghani told Bloomberg that Iraq is keen to restart exports through Ceyhan and to maintain strong economic ties with Turkiye.

Why a Strategic U.S.-Iraq Partnership Matters for the Iraqi People

Ramadan Kareem. I hope this opinion piece provides some ideas to consider during this month of reflection with family and friends. With the recent launch of the U.S.-Iraq Higher Military Commission, U.S. and Iraqi leaders are negotiating a transition of the International Coalition, and specifically the United States military presence, that has long supported Iraqi partners in defeating Da’esh. As Iraqis across this country’s diverse communities closely watch this important transition, many wonder what it will mean for our broader, 360-degree strategic relationship. Some even question why it is so important that our partnership remains at all. I understand that not all Iraqis view our relationship the same way, and disagreement over the direction of your country is natural—in fact, even the mark of a maturing democracy. To that end, the present moment brings a golden opportunity to consider what kind of long-term strategic relationship you want to build with the United States. The stakes in answering this question are high – not just for U.S.-Iraq relations, but for Iraq’s relationship with the world. As the U.S. Ambassador to Iraq, I am honored to work each day with the Iraqi people and their representatives to present the United States’ case for a strategic partnership. Within the historic 2008 U.S.-Iraq Strategic Framework Agreement that guides our relationship, I see how much Iraq has to gain from our enduring strategic partnership because I see the dividends our strong relationship is already bringing to Iraqis. Here is what I see. We are committed to Iraq’s security, stability, and sovereignty, having stood shoulder-to-shoulder with Iraqi partners to liberate Iraq from the scourge of Da’esh. As we mark the tenth anniversary of the rise of Da’esh and fifth anniversary of its territorial defeat, we should be clear-eyed about the threat it still poses to Iraq – from both Iraq and Syria. We want Iraq’s security forces to have the capability they need to meet future threats, which is why, since 2012, the U.S. Congress has appropriated more than $3.5 billion to build up Iraq’s security forces. The United States provides critical sustainment, world-class equipment like F-16 fighter jets and M1 Abrams battle tanks, and professional training that bolsters Iraqi security forces to be representative of Iraq’s diverse society, answerable to Iraq’s sovereign government, and capable of defending Iraq and its role forging stability across the Middle East. But we need much more than just a security relationship. We need economic, cultural, educational, and people-to-people ties that build a modern Iraq that is stable, secure, sovereign, prosperous, and connected to the world. The United States remains Iraq’s largest donor and supporter. Over the last 20 years, the U.S. Agency for International Development has provided Iraq more than $11 billion in development aid to improve communities. This helped Iraqis launch hundreds of new businesses, create thousands of new jobs, and build 150 new schools, 25 health care clinics, and 130 water facilities. Since 2014, we have provided more than $3.6 billion to support vulnerable displaced Iraqis and refugees with health care, medicine, safe drinking water, and better sanitation. Just since 2017, we have invested $157 million in Iraqi-led projects to help bring drinkable water to more than 12 million Iraqis. Thousands of Iraqis benefit from our educational and cultural exchanges. Since the start of our high school and university student exchange programs 17 years ago, more than 5,000 young Iraqis have traveled to the United States and returned to do great things for Iraq. In 2024, 400 more Iraqis will visit the United States through our exchange programs, including the prestigious Fulbright Program, the Iraqi Young Leaders Exchange Program, and the International Visitors Leadership Program. We also offer programs in Iraq – including English-language instruction, teacher training, and empowerment opportunities for job seekers, start-ups, and climate advocates. Our programs provide women and girls diverse skill-building initiatives, including earning tech-sector certifications from Microsoft and Google. Our Embassy in Baghdad and Consulate General in Erbil issue thousands of visas each year supporting the travel of Iraqis to reunite with family, enroll in university, conduct research, establish business relationships, receive medical treatment, and simply enjoy the United States. Our presence makes these connections possible. Trade between the United States and Iraq means American farmers produce food that feeds Iraqi families. American energy companies offer cutting-edge electrical grid technology to help pinpoint and even avoid electrical blackouts, upgrade electrical turbine efficiency while installing new generating capacity, and capture flared natural gas to produce home-grown power. American pharmaceutical companies bring Iraqis high-quality vaccines to fight sickness while others invest in Iraqi hospitals and clinics with medical equipment to save lives and modern neonatal technology to care for the youngest Iraqis. We have supported Iraq’s Central Bank as it increases the number of Iraq’s commercial correspondent banking relationships, an enormous accomplishment for Iraq in normalizing global trade relationships and safely conducting its trade in U.S. dollars. Total deposits held in Iraqi commercial banks rose by nearly 40 percent over the last two years, signaling growing consumer trust in Iraq’s banking institutions as we work together to increase transparency, root out corruption and theft, and connect Iraq’s banking sector in a competitive global economy. To be sure, other countries are knocking at Iraq’s door and advertising alternatives to what the United States and our partners offer. But as the U.S. Ambassador to Iraq, I don’t see any of them delivering to the Iraqi people as much as the United States already does every day. And none can offer Iraq an equivalent real and equal partnership that connects Iraq with the world and fosters Iraq’s prosperity. We are building bridges between the people of United States and Iraq that will last generations. When I speak to Iraqi young people representing this country’s changemaking future, they tell me they want more reliable services, better education, greater employment, higher quality of life, and more opportunity. Knowing everything we can accomplish together through a strong U.S.-Iraq strategic partnership, we can be part of making their dreams a reality.

Salaries of the ministries and departments of the Kurdistan Region

The salaries of the ministries and departments of the Kurdistan Region after the audit by the Iraqi Ministry of Finance: • Ministry of Education: 147 billion 585 million dinars • Ministry of Interior (Civil Servants): 75 billion 360 million dinars • Ministry of Health: 52 billion 681 million dinars • Ministry of Higher Education: 45 billion 576 million dinars • Ministry of Electricity: 17 billion 373 million dinars • Ministry of Municipalities and Tourism: 16 billion 303 million dinars • Ministry of Endowments and Religious Affairs: 7 billion 677 million dinars • Ministry of Finance and Economy: 10 billion 848 million dinars • Ministry of Agriculture and Water Resources: 8 billion 566 million dinars • Ministry of Justice: 4 billion 905 million dinars • Ministry of Labor and Social Affairs: 4 billion 328 million dinars • Ministry of Culture and Youth: 4 billion 246 million dinars • Ministry of Transportation: 3 billion 826 million dinars • Supreme Judicial Council: 3 billion 858 million dinars • Ministry of Commerce and Industry: 2 billion 80 million dinars • Ministry of Natural Resources: 1 billion 880 million dinars • General Agency of Mines: 422 million dinars • Ministry of Planning: 684 million dinars • Corruption Commission: 356 million dinars • General Board of Kurdistan Regions: 117 million dinars • Financial Supervision Bureau: 805 million dinars • National Election Commission Office: 350 million dinars • Erbil Election Commission Office: 60 million dinars • Sulaimani Election Commission Office: 66 million dinars • Duhok Election Commission Office: 64 million dinars • Halabja Election Commission Office: 63 million dinars • Presidency of the Kurdistan Parliament: 1 billion 222 million dinars • Presidency of the Office of the Council of Ministers: 70 million dinars • Kurdish Academy in the Council of Ministers: 33 million dinars • Coordination and Monitoring Office: 53 million dinars • Office of Technology and Information: 32 million dinars • Public Service Council: 15 million dinars • Media and Information Office: 16 million dinars • Foreign Relations Office: 19 million dinars • Ministry of Reconstruction and Housing: 232 million dinars • Environmental Protection Board: 229 million dinars • Independent Human Rights Commission: 219 million dinars • Total: 429 billion 256 million dinars • Military and civilian pensions: 119 billion 139 million dinars • Social welfare salaries: 10 billion 967 million dinars • Salaries of martyrs and Anfal victims: 859 million dinars Total salary: 560 billion 221 million dinars

Iraq to enhance the work of the National Tanker Company: Oil Ministry

The Ministry of Oil announced on Friday, its efforts to strengthen the Iraqi oil tanker fleet with a new number after two Norwegian tankers entered commercial operations, while revealing plans to contract with reputable international companies to enhance the work of the National Tanker Company. “The Ministry of Oil is seeking to strengthen the national fleet with a number of tankers, and recently two tankers entered the commercial business, implemented by the Norwegian company, which is one of the companies specialized in this field,” The spokesman for the Ministry of Oil, Asim Jihad, told the Iraqi News Agency (INA). "Iraq's main export ports are the southern ports represented by the port of Basra, the single buoys, and the port of Al-Amaya, in addition to the northern port, which is the Turkish port of Ceyhan," He pointed out "the largest production comes from southern port."

Iraq Bans 8 Local Banks From Carrying Out US Dollar Transactions

Days after a key U.S. Treasury official visited, Iraq has barred eight local commercial banks from transacting in dollars in an effort to reduce fraud, money laundering, and other illicit uses of U.S. currency. The banks are prohibited from participating in the daily dollar auction held by the Iraqi central bank, which is the primary source of hard currency for the import-dependent nation and the focus of an American campaign against the smuggling of money into Iran. Relying primarily on Washington’s goodwill to guarantee that its access to oil income and finances is not impeded, Iraq is an unusual ally of both the United States and Iran, holding more than $100 billion in reserves in the U.S. A central bank document that was validated by a bank official specified the banks that were prohibited. The Kurdistan International Islamic Bank for Investment and Development, Ahsur International Bank for Investment, Investment Bank of Iraq, Union Bank of Iraq, Al Huda Bank, Al Janoob Islamic Bank for Investment and Finance, Arabia Islamic Bank, and Hammurabi Commercial Bank are the ones mentioned. Ashur, Hammurabi, and the chairman of the private bank association in Iraq, which is in charge of the banks in question, did not immediately reply to calls for comment. A Treasury spokesman said, “We commend the continued steps taken by the Central Bank of Iraq to protect the Iraqi financial system from abuse, which has led to legitimate Iraqi banks achieving international connectivity through correspondent banking relationships.” part of a larger campaign to stop dollars being smuggled into Iran through the Iraqi financial system. U.S. and Iraqi officials said that the decision was made in response to a request from Washington. According to the central bank, banks that are prohibited from transacting in dollars are nonetheless permitted to operate and do so in other currencies. Brian Nelson, the senior sanctions officer for the U.S. Treasury Department, met with top Iraqi authorities this week in Baghdad to explore ways to safeguard the international and Iraqi financial systems from terrorist, criminal, and corrupt actors. During the visit, the Treasury imposed sanctions against Al-Huda Bank, alleging that the bank had transferred billions of dollars to organisations supported by Iran. After the death of three U.S. soldiers, which has been attributed to hardline Iraqi factions, a senior Treasury official said that Washington wanted Iraq to do more to assist counter Iran-backed armed organisations operating out of Iraq. Armed organisations with interests in Iraq’s extremely informal economy, particularly the banking sector, which has long been considered a hotbed of money-laundering, and major parties backed by Iran helped bring the current Iraqi government to power. Nevertheless, collaboration between Iraqi Prime Minister Mohammed Shia al-Sudani and Western authorities has been praised for implementing financial and economic reforms that aim to align the Iraqi economy with global norms and limit Iran’s and its allies’ access to US cash.

Pentagon confirms strikes against 85 targets in Iraq and Syria

US forces have begun a new bombing campaign in the Middle East to punish Iran’s Islamic Revolutionary Guards (IRGC) Quds Force and affiliated militia groups for a series of drone and missile attacks on American military bases in the region. Washington’s latest airstrikes began around midnight Baghdad time on Saturday and hit more than 85 targets in Syria and Iraq, the US Central Command (CENTCOM) said in a statement. The operation involved “numerous aircraft,” including long-range bombers flown from the US, which dropped over 125 precision munitions on their targets. Those targets included command and control centers, intelligence sites, weapons caches, and supply-chain facilities of Iranian-backed militias, as well as “their IRGC sponsors who facilitated attacks against US and coalition forces,” CENTCOM said. The bombings follow a series of assaults on American military bases in the Middle East, including a drone attack that killed three American soldiers and wounded more than 40 others at secretive US installation in Jordan. That base, called Tower 22, is located near the Syrian and Iraqi borders. The attack on Tower 22 was “planned, resourced and facilitated” by the Islamic Resistance in Iraq, White House National Security Council spokesman John Kirby said on Wednesday. The group consists of multiple militias, including Kataib Hezbollah, which has launched multiple rocket and drone strikes against US forces in the region since the Israel-Hamas war began in October. Kirby suggested that the US response would be carried out over multiple days. It “won’t just be a one-off,” he said. “As I said, the first thing you see will not be the last thing.” He added that Biden is still trying to avoid a broader war with Iran. Media reports in recent days raised concern that Biden was telegraphing his plans and giving the militias too much time to take preparatory steps, such as vacating obvious targets. Pentagon chief Lloyd Austin tried to deflect those worries on Friday, denying that the administration was giving Iran too much warning. He said the US response will be “multi-tiered” and insisted that neither he nor Biden would tolerate attacks on American troops. Biden has blamed Iran for supplying the weapons that Islamic militants have used in attacking US forces in the Middle East more than 150 times since the Israel-Hamas war started. He has faced political pressure to respond aggressively, including calls by Republican lawmakers to launch devastating strikes inside Iran. The IRGC’s Quds Force is an elite unit that specializes in guerilla warfare and intelligence-gathering outside Iran. It has sought to drive American forces out of neighboring Iraq since the US invasion in 2003.