KRG Crude Revenues Set To Edge Higher For 2016

Iraqi Kurdistan is set to buck the regional trend and take in more in oil export revenues this year than last. But modest gains are only thanks to traders’ overpayments – which will have to be paid back.

Oil export earnings by Iraq’s Kurdistan Regional Government (KRG) are set to rise by 3% in 2016 to $5.44bn, with monthly payments from buyers averaging $453mn in the first half of the year. But with buyers having overpaid by around $200mn in advance payments so far this year, revenues would fall below 2015 levels if these debts are called in over the coming months (see chart 1).

Erbil received a share of the Iraqi federal budget for the first five and a half months of 2015, but from mid-July began selling oil independently and Baghdad cut off payments as a result. Since then it has relied entirely on direct sales revenues, which have faltered due to falling prices and output. (CONTINUED - 1245 WORDS)