Iraqi Kurdish oil exports to world markets will remain halted for at least another two weeks, Turkish shipping and industry sources said on Friday, as security threats to the pipeline in Turkey’s southeast have significantly increased.
The outage, one of the longest in the past two years, is a major blow to Iraq’s semi-autonomous region which depends on revenue from oil exports via the pipeline and is struggling to avert economic collapse brought on the slump in energy prices.
It also highlights how intertwined Iraqi Kurdistan’s economic woes are with the deteriorating security in Turkey’s predominantly Kurdish southeast, engulfed in the worst violence since the 1990s after a two year-long ceasefire between the state Kurdish militants collapsed last July.
The interruption is also bad news for European refiners which have been snapping up relatively cheap Kurdish barrels over the past year, boosting profits and already being spoilt for choice in an oversupplied market.
Carrying around 600,000 barrels per day (bpd) of crude to Turkey’s Mediterranean port of Ceyhan from fields in Iraq’s Kurdish region and Kirkuk, the pipeline has been offline since Feb. 17.
“The physical repairs of the pipeline will not take a long time. However, the work to fully restore the security of the pipeline will take more time. We think that it will take two weeks at least,” one Turkish industry source said.
Turkish energy officials have declined to comment on the issue.
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Considered a terrorist group by Turkey, the United States and the European Union, Kurdistan Workers Party (PKK) launched a separatist armed rebellion against the Turkish state three decades ago in a conflict that killed more than 40,000 people.
The PKK, which says it is fighting for autonomy for Turkey’s large ethnic Kurdish minority, has sealed off entire districts of some towns and cities in the southeast and declared autonomy, prompting the security forces to step up their operations.
Idil, a town in Sirnak province, through which the pipeline passes, on border with Iraq and Syria have been a new focus in Turkey’s operations. Army struck PKK targets in the region with Cobra helicopters earlier this week killing 12 militants.
A Turkish shipping source said one crude tanker was due to be loaded for exports on Friday, with 375,000 barrels of Iraqi Kurdish oil from Ceyhan stocks. Once that cargo is exported, the stocks will depleted, he said but added there were several more vessels awaiting crude.
“We have been told that large amounts of explosives have been buried near the pipeline and that it will take weeks to clear all that,” the shipping source said.
