Iraq is blocking US-supported oil exports, urging Congress for assistance as businesses suffer
The Iraqi Government’s Chokehold on Kurdistan’s Oil Exports Sparks Urgent Plea for Help
The Iraqi government is choking off the exportation of more than 400,000 barrels of oil per day in the country’s Kurdistan territory, prompting a regional trade association to petition Congress for help pressuring Baghdad to reverse course.
The Association of the Petroleum Industry of Kurdistan has sent a letter to the House and Senate foreign affairs committees, urgently warning that U.S. and international investments worth over $10 billion are now at risk due to the Iraqi government’s obstruction of crude oil reaching the market. Shockingly, this impasse has already resulted in a staggering loss of over $7 billion in revenue.
This issue has been simmering for more than 10 months, but its consequences could further ignite tensions in a region already on the brink of a broader conflict with Iran-backed terrorist proxies. The militants, based in Iraq and supported by Tehran, have repeatedly targeted U.S. positions and were responsible for a recent strike in Jordan that claimed the lives of three American service members. The Kurdistan region, which has been a reliable ally to the United States amidst the chaos, is now facing instability due to the lost revenue from oil sales, as Baghdad’s government grows increasingly aligned with Iran.
“The halt of crude oil exports from the region, now lasting over 10 months, coupled with the unresolved Federal Budget issues by the [government of Iraq], continue to threaten the fiscal stability and autonomous status of the [Kurdistan region]—a region that has been a steadfast security ally of the United States in the Middle East,” emphasized the petroleum association in its letter to Congress.
The association represents eight international oil and gas companies operating in Kurdistan, including three U.S.-owned companies and several others with substantial American investments. The letter, obtained by the Washington Free Beacon, comes just before Iraqi Prime Minister Mohammed Shia Al Sudani’s visit to the White House. The business association is urging lawmakers to exert pressure on Al Sudani regarding the unresolved oil crisis during his visit to Washington, D.C. Failure to find a resolution not only jeopardizes U.S. investments but also strengthens Iran’s influence in the country.
“We remain committed to Kurdistan, despite the recent ballistic missile attacks and increased threats from Iranian-backed militia groups throughout Iraq,” stated the association. “It is imperative that we resume full oil production and recommence oil exports from Kurdistan to create economic stability in the region as a bulwark against destructive and destabilizing influences from external actors.”
Oil from the Kurdistan region is a vital revenue stream for this U.S. ally, backed by significant public and private sector investments, including approximately $300 million from the U.S. Development Finance Corporation. However, the Kurdish government, operating autonomously from Iraq’s central government, is already grappling with budgetary challenges, and the halt in oil revenue has exacerbated the crisis, posing a threat to the region’s resistance against Iranian interference.
“The Iraqi prime minister should demonstrate that he is committed to leading his government to deliver a mutually beneficial solution that will no longer economically strangle the Kurdistan Region of Iraq,” emphasized Myles B. Caggins III, the association’s spokesman. “This solution includes the resumption of oil exports from the Kurdistan Region into the international markets with payment and contractual certainty for western and American companies to resume operations.”
Congress has also expressed concerns about the situation, with several Republican members of the House Foreign Affairs Committee pressuring the White House to address the unacceptable treatment of Iraqi Kurds and the Kurdistan Regional Government (KRG) by Iran-aligned elements in Iraq. They highlighted the closure of the Iraq-Türkiye pipeline, which has severed the KRG from the majority of its revenue. This comes at a time when oil prices are rising, and Iran continues to export oil despite U.S. sanctions.
What are the implications of the lost oil revenue on American national security, considering Iraq’s alignment with Iran and the breeding grounds for terrorist proxies?
E region and puts American national security at risk.
The Iraqi government’s chokehold on Kurdistan’s oil exports has severely impacted the region’s economy. The Association of the Petroleum Industry of Kurdistan warns that the loss of revenue from oil sales is threatening the fiscal stability and autonomous status of the Kurdistan region. This is deeply concerning considering the region’s role as a steadfast security ally of the United States in the Middle East.
The implications of this oil crisis go beyond economic instability. Iraq has been the breeding ground for Iran-backed terrorist proxies that have targeted U.S. positions and caused the deaths of American service members. As the Iraqi government grows increasingly aligned with Iran, the instability caused by the lost oil revenue further exacerbates tensions in the region, putting American national security at risk.
The Association of the Petroleum Industry of Kurdistan emphasizes that the halting of crude oil exports coupled with unresolved Federal Budget issues by the Iraqi government continue to threaten the region’s stability. This situation is alarming considering the significant investments made by international oil and gas companies in Kurdistan, including three U.S.-owned companies and others with substantial American investments. The loss of over $7 billion in revenue already underscores the urgency of finding a resolution to this crisis.
As Iraqi Prime Minister Mohammed Shia Al Sudani visits the White House, the business association has urgently called on Congress to exert pressure on Al Sudani regarding the unresolved oil crisis. The letter, obtained by the Washington Free Beacon, highlights the need for U.S. lawmakers to address this issue during Al Sudani’s visit to Washington, D.C. Failure to find a resolution not only jeopardizes American investments but also allows Iran to strengthen its influence in the region.
The U.S. and the international community cannot afford to overlook this oil crisis. It is crucial for Congress to engage with Iraqi leaders and find a resolution that ensures the free flow of oil from Kurdistan. This will not only support the economic stability and autonomous status of the region but also help in countering Iranian influence and safeguarding American national security interests in the Middle East.
The Association of the Petroleum Industry of Kurdistan’s plea for help should not go unanswered. Immediate action is needed to pressure the Iraqi government to reverse its chokehold on Kurdistan’s oil exports. The consequences of inaction are severe, with billions of dollars of investments and American national security interests hanging in the balance.
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