Iraq descends into chaos, Baiji refinery shut, Kurdistan offers to help export Iraqi crude

摘要

Iraq was plunged into chaos by a full-scale attack by forces belonging to the armed radical jihadist group, the Islamic State of Iraq and the Levant (ISIL; also known as ISIS). From bases inside north-western Iraq and Syria, ISIS s forces moved south and eastwards to capture a number of small oilfields along with the main oil export pipeline from Kirkuk to Ceyhan. The country's largest refinery, the 320,000 bpd Baiji refinery in central Iraq, also came under attack and was closed down as a result, which led to shortages of refined products across Iraq. Several foreign oil companies began to evacuate expatriate staff, although the main southern oilfields were initially reported to be operating normally, with exports to the Persian Gulf unaffected. The Kurdistan Regional Government (KRG) meanwhile sent its troops to take control of the main northern oilfields in Iraq, centered on the Kirkuk oilfield-complex. Some buyers of Iraqi crude, including refiners in India, were reported to be seeking oil from other sources in case exports from Iraq's southern fields were eventually disrupted. The KRG offered to install a pipeline link between the Kirkuk field and its own independent oil export pipeline to Turkey to enable Kirkuk and other fields in northern Iraq to resume exporting, though it was not clear how or when any such arrangement might operate [1]. The government in Baghdad formally objected to the export of five cargoes of Kurdish crude via Turkey, saying the crudes were illegal, as they were not authorized by the Iraqi State Oil Marketing Organization (SOMO).