Kurdistan Oil Smuggling: Illicit Revenues Used to Pay Off US Debts
Kurdistan Oil Smuggling: Illicit Revenues Used to Pay Off US Debts
2-1-2025
Information / Baghdad..
The issue of oil smuggling from the Kurdistan Region continues to stir controversy within Iraq, as reports indicate that the regional government is exploiting the financial proceeds from smuggling operations to pay its debts to American oil companies.
Despite the decisions issued by the Federal Court on the necessity of subjecting the oil sector in the region to the authority of Baghdad, smuggling operations are still continuing through unofficial outlets, which deprives the state of significant financial revenues.
At the same time, the federal government is under international pressure, especially from the United States, to approve additional financial commitments to the region to pay off its debts, even if they are in violation of Iraqi laws.
These pressures contributed to the passage of new financial allocations to the regional government within the budget, despite its failure to commit to handing over oil revenues to Baghdad.
Regarding the subject, political analyst Ali Fadlallah said in a statement to Al-Maalouma Agency, “The Kurdistan Regional Government is disposing of the capabilities of the Iraqi people away from the authority of the federal government, exploiting the situation to achieve personal interests.”
He pointed out that “some international parties, especially the United States, exerted pressure on the federal government regarding the budget law, which led to the approval of additional financial sums for the regional government to pay its debts to American companies.”
He explained that “this matter reveals the exploitation of the Iraqi people’s resources and confirms the weakness of the federal government and its procedures, in addition to the fragility of the political class.”
He stressed “the need for the political class and the federal government to take a firm stance to end this exploitation and prevent the regional government from achieving personal gains at the expense of the national interest.”
The continuation of these policies reflects the weakness of the federal government in imposing its control over the oil file, which leads to the exacerbation of the economic crisis as a result of the state losing revenues from smuggled oil. It also contributes to deepening political differences between Baghdad and Erbil, as the central government refuses to continue supporting the region financially without its commitment to the laws, while the region exploits its political and international influence to ensure the continued flow of funds to it.
Regarding the issue, the member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, confirmed in a statement to / Al-Maalouma / Agency, that “all calculations for extracting and transporting a barrel of the region’s oil at $16 were not estimated by the House of Representatives committees, but were estimated by the negotiations taking place between the Federal Ministry of Oil and the Ministry of Wealth and Natural Resources in the region and the Advisory Board in the Council of Ministers, and this number was agreed upon and is considered a temporary number.”
He added, “This number will be presented to an international technical body that will calculate the cost of extracting and transporting a barrel of oil for each field separately, and therefore the agreement will be based on the outcome of this committee between the federal government and the region, and if an agreement is reached, it will be implemented retroactively,” noting that the amendment of paragraph 12/second/c/ of the Federal Budget Law will be put to a vote during the next session of the House of Representatives.”
The continued smuggling of oil by the Kurdistan Region and the exploitation of financial revenues to pay off foreign debts represents a major challenge for the federal government and strict measures must be taken to stop and halt this phenomenon.
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