Iraq faces US sanctions threat over Kurdistan Region oil exports

The Trump administration is threatening Iraq with economic sanctions if it doesn't quickly resume Kurdish oil exports through Turkey's Ceyhan pipeline.

This pressure, according to Reuters, significantly influenced the Iraqi oil minister's recent announcement to restart exports. The US aims to offset potential losses from reduced Iranian oil exports (a key goal of the "maximum pressure" campaign against Iran) by increasing Kurdish oil flow. This restart would end a nearly two-year halt in shipments. 

Iraq, balancing relationships with both the US and Iran, fears being caught in the middle of the US's aggressive Iran policy. The US has already taken steps to tighten financial controls on Iraq's dealings with Iran, including banning several banks from accessing US dollars. 

While the export resumption is announced, technical challenges might cause delays. Meanwhile, Iran maintains significant influence in Iraq. The US is also pressuring Iraq to stop the increased smuggling of Kurdish oil to Iran, which has risen since the Ceyhan pipeline closure in March 2023 due to a legal dispute. 

The US argues that resuming legal exports through Turkey is crucial for regional security and global oil price stability. However, even with resumed Kurdish exports, the impact on offsetting Iranian oil losses would be limited, as Iran has a history of evading sanctions. 

News Code 159909

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