Oil in Global Economy Series: Oil flow from Kurdistan declines over conflict

Iraq’s assault on disputed regions in Kurdistan, which have been under Kurdish control since the fall of Saddam Hussein in 2003 has finally started talking a toll on oil flow from oil-rich Kurdish regions. After amassing armed forces near the Kurdish border over the past week, Iraq launched a military assault on early Monday and reportedly taken back control of vast regions from Kurdish forces as Kurdish Peshmerga fighters were asked to leave the region by their top commanders.  Due to the landlocked position of Kurdistan, most of its oil flows through the pipeline to Turkey’s Ceyhan port to global markets.

According to shipping companies, and TankerTrackers.com, oil flow has been gradually disrupted.

• On Sunday, oil was flowing to Ceyhan at 0.61 million barrels per day.
• On Monday, the flow declined by 0.1 million barrels to 0.51 million barrels per day.
• On Tuesday, it reportedly declined further to 0.35 million barrels per day.
• On Wednesday, oil flow declined to 225,000 barrels per day.
• And the latest report on Thursday suggests that flow has declined further to 180,000 barrels per day.

Oil price remains upbeat over the conflict in the region. WTI is currently trading at $52 per barrel and Brent at $6.2 per barrel premium to WTI.

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