Mon Feb 20, 2017 6:54PM
Iran and Iraq have signed a basic agreement that envisages exporting Iraqi oil through the Iranian territory.
Iran and Iraq have signed a basic agreement that envisages exporting Iraqi oil through the Iranian territory.

Iran and Iraq have signed a basic agreement that envisages exporting Iraqi oil through the Iranian territory – a scheme that would remove Baghdad’s reliance on the Kurdistan Regional Government (KRG) to export its oil through a pipeline to Turkey.

The agreement was signed during a meeting between Iraq’s Oil Minister Jabar al-Luaibi and his visiting Iranian counterpart Bijan Zanganeh. 

Both sides also agreed to commission an international consulting company to conduct a feasibility study over the project, Iran’s Shana news agency reported.

This came against the backdrop of a long-standing dispute between Baghdad and the KRG over a scheme to pipe Iraq’s oil from Kirkuk to the Turkish Mediterranean port of Ceyhan.

The flow of the pipeline was interrupted for several months last year as the Iraqi government disagreed with the Kurds on their share in the national oil revenue and budget, Reuters wrote in a report on Iran-Iraq agreement. 

Last August, a top Iraqi official was quoted by media as saying that Baghdad was considering shipping its crude oil through Iran.   

This was raised after indications grew that Iraq and the KRG were unable to resolve disputes over a demand by the Kurds for a bigger share of the oil proceeds. 

"If the negotiations [between Iraq and the KRG] come to a close without an agreement, we will start to find a way in order to sell our oil because we need money, either to Iran or other countries," Reuters quoted Iraq’s Deputy Oil Minister Fayadh al-Nema as saying in a report last August.

Under the scenario, the Iraqi government would be shipping about 150,000 barrels per day of oil through Iran from fields in Kirkuk, the report added.