The KRG responded to the two reports with an official denial. They issued a statement that they would crack down on any smuggling, and claimed that any such activity was the work of gangs, and had no involvement of the regional government. There are three refineries in Kurdistan, which they said made only legal sales. That’s highly unlikely as they are making money from their endeavors, not to mention that oil smuggling in Kurdistan and other parts of Iraq has been an open secret for the last thirty years. Minister Hawrami’s interview with the Times was a political move meant to press Baghdad to let it export its oil. The region hasn’t been allowed to do so since mid-2009. Politics however is taking precedent in Iraq right now, so the Kurds will have to wait for a new government to be formed, and a new oil minister to be appointed until they will be able to return to legal petroleum sales. Until then, they will continue with their illegal activities with Iran despite their official pronouncements.
Dagher, Sam, “Smugglers in Iraq Blunt Sanctions Against Tehran,” New York Times, 7/8/10
Platts, “Iraq says to discuss oil smuggling to Iran with Kurd authorities,” 7/11/10
Reuters, “Iraq Kurds say to crack down on fuel smuggling,” 7/11/10