Military tensions between the federal government in Baghdad and the Kurdistan Regional Government (KRG) have eased since the 16 November clash at Tuz Khurmatu, which left at least one dead. But the oil dispute, which is largely responsible for the crisis, continues to simmer.

At least one KRG producer has cut production amid continued budget wrangles with central government over payments for oil investments, MEES understands. If media reports of a 50% cut to KRG export volumes (from recent levels of around 170,000 b/d)are proven correct, the deterioration in relations and accompanying export reduction would be treading a familiar path. (CONTINUED - 622 WORDS)