FT: Kurds supplying most of Israel’s oil

Israel has bought as much as three-quarters of its oil from Iraq in recent months, according to a report in the Financial Times writes Haaretz.

Between May and August, Israeli oil companies and refineries imported some 19 million barrels of crude oil at an estimated cost of $1 billion.

The statement adds that the Kurdistan regional government and the five Kurdish parties approved the agreement to sell the region’s oil directly since last June and the government managed to provide its expenses, employees’ wages and pay the oil companies’ dues.

The report was based on shipping data, trading sources and satellite tanker tracking.

The report also expanded on Kurdistan’s role in exporting oil to other European nations, including Italy, France and Greece, noting that traders and industry analysts believed Israel may be purchasing the oil at a discounted price.

News of the volume of reported KRG sales to Israel will likely be a source of even greater tension between the semi-autonomous region and the Iraqi government which does not have formal diplomatic relations with Israel. The FT says that this is the equivalent of about 77% of average Israeli demand, which runs at roughly 240,000 barrels per day, and accounts for more than a third of all of the northern Iraqi exports.

Baghdad, like many Middle Eastern capitals, refuses to recognize Israel and has no official ties with the country.

“We do not care where the oil goes once we have delivered it to the traders”, a senior Kurdish government adviser in Erbil told the Financial Times.

Oil from Kurdistan presumably makes its way to Israel via private dealers to Turkey, at which point it is hard to trace back to its origins. However, Baghdad’s payments to Kurdistan have been hindered by its own financial woes, prompting the Kurds to start selling independently.