BAGHDAD: Iraq has asked British energy giant BP to help bolster production at oilfields recaptured from the Kurds in northern Kirkuk province, Oil Minister Jabbar Al-Luaybi said Sunday.
Luaybi told AFP he wanted to discuss a request for BP to draft a study on increasing output when the company’s boss visits Kirkuk in the coming days.
“I suggested they study my proposal and I am waiting for their reply,” Luaybi said.
BP is the biggest foreign player in Iraq’s oil sector, running the Rumaila field in the south of the country which produces 1.5 million barrels per day (bpd) — almost a third of Iraq’s output.
In 2014, the oil ministry and BP signed a consultancy deal under which the energy titan would study reserves in the Baba Gurgur and Havana fields and ways of developing them.
But Baghdad lost the Kirkuk fields to Kurdish forces that year during a sweeping offensive by Daesh, and the deal was never implemented.
“Because of Daesh, it was frozen,” Luaybi said.
But he said Iraq had signed a new memorandum with BP in January after the federal government seized back control of the area following a September Kurdish independence referendum bitterly opposed by Baghdad.
Baba Gurgur, discovered in 1927, is Iraq’s oldest oilfield.
Central government forces recaptured it from the Kurds in October along with the fields of Havana, Bai Hassan, Jambu and Khabbaz.
The five fields have a total output of around 470,000 barrels of oil per day (bpd) but production and export have been slow as the main pipeline linking Kirkuk to the Ceyhan oil terminal in Turkey was damaged and needs repairs.
Luaybi said a new 350-kilometer (220-mile) oil pipeline able to pump over one million bpd from the Kirkuk fields to Turkey may be completed within as little as a year.
In the meantime, Iraq will export up to 60,000 bpd by road to refineries around Iran’s Kermanshah, where oil firms face major challenges transferring oil from wells in southern Iran, he said.
“We will supply those refineries and (receive) the equivalent quantities in our southern port” of Basra, he said.
Luaybi also said talks were underway with the Kurdish authorities with a view to pumping Kirkuk oil via a pipeline through the autonomous Kurdish region.
“We hope to succeed. We have reached a sort of understanding so far,” he said.
A sixth oilfield, Khurmala, remains under Kurdish control, but Luaybi insisted it belongs to Iraq’s state-owned North Oil Company.
“Khurmala belongs to NOC and was discovered more than 30 years ago,” he said. “We started developing it in 1995. NOC and the oil ministry have finished drilling 36 wells there.”
Luaybi said the Iraqi oil ministry had launched a $37 million program in 2004 to develop Khurmala.
The ministry of resources in the autonomous Kurdish region of northern Iraq seized Khurmala in 2008-2009, Luaybi said.
“But it’s a field that belongs to the oil ministry of the federal government,” Luaybi said.
Iraq is the second largest producer in the OPEC cartel after Saudi Arabia.
It reported its oil exports at 109.6 million barrels in December last year, the same month that the government announced victory over Daesh.
Iraq in December 2017 earned around $6.5 billion (5.3 billion euros) from crude sales, at $59.3 per barrel.
Iraq asks BP to study developing Kirkuk oilfields
Iraq asks BP to study developing Kirkuk oilfields
Saudi Aramco bolsters global oil market stability amid rising regional tensions
RIYADH: Amid growing logistical challenges facing the energy sector, operational moves by Saudi Aramco are emerging as a stabilizing factor in global oil supply.
The company has offered additional crude shipments on the spot market, a step analysts see as aimed at absorbing supply shocks and ensuring the continued flow of oil through key energy corridors.
The move aligns with Saudi Arabia’s long-standing role as a leading global producer and is intended to limit price volatility and maintain balance between supply and demand at a time of heightened geopolitical uncertainty.
Reuters reported that Aramco has offered more than 4 million barrels of Saudi crude through rare spot tenders, as tensions between the US and Iran disrupt Middle Eastern exports.
Mohammad Al-Sabban, former senior adviser to the Saudi energy minister, said the current surge in oil prices does not necessarily reflect an immediate shortage of supply. Instead, it is largely driven by what energy markets call a “geopolitical risk premium.”
Speaking to Asharq Al-Awsat, Al-Sabban said prices remaining above $100 per barrel reflect global anxiety that the conflict could expand and threaten future supply security.
He noted that higher prices, while boosting short-term revenues and fiscal surpluses for oil-exporting countries, also bring hidden costs. These include increased spending on security measures to protect oil infrastructure — costs that rise in a volatile regional environment where Gulf states face mounting security pressures.
Al-Sabban also pointed out that spot market sales are currently generating greater returns than long-term futures contracts. The uncertainty surrounding the conflict has led buyers to pay premiums for immediate deliveries, making spot transactions more attractive during the current crisis.
Strategic chokepoint
Shipping through the Strait of Hormuz, which carries roughly 20 percent of global oil supply, remains central to the crisis.
Al-Sabban warned that even a temporary closure of the waterway would inevitably reduce available supplies, potentially triggering panic in markets and forcing countries to draw from strategic reserves.
He recalled historical precedents, noting that during the Iran-Iraq war, energy markets became a hub for speculation, with negative economic consequences emerging later.
Asked whether the conflict represents a short-term economic opportunity or a broader risk for regional economies, Al-Sabban said the reality is a mix of both. High prices may offer temporary gains as long as oil remains above $100 a barrel, but a prolonged conflict could ultimately impose heavier economic burdens through rising logistical and security costs.
Flexible response
Financial and economic adviser Hussein Al-Attas said Aramco’s decision to release additional cargoes on the spot market reflects significant flexibility in managing supply and responding quickly to market shifts amid rising demand and concerns about potential shortages.
He told Asharq Al-Awsat that the move sends an important signal to global markets that Saudi Arabia continues to play the role of a swing producer, capable of intervening to maintain market balance and ease fears about supply security.
Al-Attas added that the recent surge in oil prices is largely tied to geopolitical tensions in a region that represents the heart of global energy supply.
While Brent crude could remain above $100 in the short term if supply concerns persist, he noted that history shows price spikes driven by political tensions are often temporary unless they lead to a prolonged disruption in supply.
Higher oil prices naturally increase revenues for exporting countries, potentially strengthening fiscal balances and enabling governments to finance spending and development projects, Al-Attas remarked.
Gulf states, particularly Saudi Arabia and the United Arab Emirates, may therefore benefit financially in the short term.
However, he cautioned that such gains are usually temporary rather than structural. Prolonged high energy prices can slow global economic growth by fueling inflation, which may eventually reduce demand for oil. As a result, the current price surge may represent a temporary financial opportunity rather than a lasting shift in oil revenues.
Ultimately, Al-Attas said the crisis carries two opposing dynamics: Gulf countries may benefit financially in the short term, but any wider regional conflict could pose greater risks to economic and commercial stability.
For that reason, he added, the region’s strategic interest ultimately lies in stable energy markets and uninterrupted oil flows, which are essential for sustaining global demand and supporting long-term economic growth.
