Iraq’s Oil Ministry announced this week that as of 1 January, it stopped supplying crude to the 100,000 b/d Erbil refinery owned by Kurdish private firm Kar Group. Supplies to the Kurdistan refinery (as well as the region’s other topping plants) were thought to be well below its nameplate capacity – MEES puts the figure in the 20,000-30,000 b/d range.
The expiry of the crude supply agreement could force a slight dip in Kurdish crude exports as previously-exported volumes of the region’s own production will now be diverted to meet local demand for oil products. Kurdish exports have averaged around 430,000 b/d in recent months, providing a crucial lifeline to the cash-strapped semi-autonomous region (MEES, 24 December 2020). It could also free up further volumes for federal Iraq to export via the KRG export pipeline to Ceyhan, or provide feedstock for the nearby Baiji refinery which is undergoing rehabilitation and is expected to reach 140,000 b/d this year (MEES, 18 December 2020). (CONTINUED - 160 WORDS)