Iraq's Kurdish region, which has halted crude exports in a row with Baghdad, owes the central government more than $5 billion and is smuggling the oil it produces through Iran, Iraqi officials said Monday. "Kurdistan does not have any refineries to refine oil, so the biggest part is being smuggled outside Iraq, especially through the Iranian border," Deputy Prime Minister for Energy Affairs Hussein al-Shahristani told a news conference.
Oil Minister Abdelkarim al-Luaybi said the government had detailed information on trafficking routes being used, including to Afghanistan. "We have detailed reports on the areas from which the oil is being smuggled, going in the direction of Iran, and which then goes to the Gulf through Bandar Abbas and Bandar Khomeini, and is being sold at lower prices than global prices," Luaybi told the same news conference.
"There are some quantities (of oil) that are going to Afghanistan through Iran," he added. Kurdistan on Sunday stopped its crude exports entirely after arguing the central government had withheld $1.5 billion owed to foreign oil companies working in the region. "After consultation with the producing companies, the ministry (of natural resources) has reluctantly decided to halt exports until further notice," the Kurdistan regional government said in a statement on its website. "There have been no payments for 10 months, nor any indication from federal authorities that payments are forthcoming."