KRG Falling Oil Revenue Exacerbates Economic Crisis

Despite the relatively timely completion of December’s payments to international oil companies (IOC) the Kurdistan Regional Government (KRG) is mired in a financial quagmire.

While oil exports and sales ramped up considerably during 2015, the constant slide in oil prices has contributed to a quadruple-whammy that has resulted in the KRG calling on the international community to provide “direct financial assistance to enable KRG to at least prevent the region from imminent collapse.”

Talk of imminent collapse is an exaggeration – compared to the rest of Iraq the Kurdish region remains a success story. But Erbil no doubt hopes that such a cri de coeur from their key ally against Islamic State (IS) will echo in western capitals. The KRG’s finances are reeling, not only from the 70-plus% fall in oil prices over the past 18 months, but also from Baghdad completely halting budget disbursements to the region since June (although full levels were never paid) due to independent Kurdish crude exports (MEES, 4 December 2015). (CONTINUED - 1195 WORDS)


chart KRG Crude Export* Revenues Slump Despite Volumes At Near-Record Levels
table KRG: Key 2015 Crude Stats ('000 B/D)