Kurds Try To Deny Their Oil Smuggling With Iran

There were two recent stories about the Kurdish Regional Government’s (KRG) oil smuggling activities. On July 8, 2010 the New York Times ran a report about the Kurds illegally selling oil to Iran. In it, the KRG’s Natural Resource Minister Ashti Hawrami made the first official admittance of the sales. The Times piece was followed up by a report on Al-Arabiya TV where they filmed dozens of fuel tankers lined up at an official Kurdish border crossing waiting to travel into neighboring Iran. The station claimed that the trucks were headed to Iran’s Abadan refinery, which is just across the border. Kurds and other Iraqis have been smuggling oil since the 1990s when the country was cut off from international markets by United Nations sanctions. Oil smuggling is easy because most authorities in Iraq look the other way in return for kickbacks, or are directly involved. There is also a general lack of oversight of the industry. Large subsidies in Iraq also make refined oil products cheaper than in neighboring countries so gangs can sell them for a tidy profit in places like Iran.

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.

SOURCES

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