Iraq’s Oil Output Might Be Affected By Iraq-Iran Barter Deal

Iraq's oil production may be affected by a deal to pay for Iranian gas imports by bartering fuel oil and crude from Baghdad, a source from state oil marketer SOMO said.

• Iraq and Iran signed an agreement to barter crude and fuel oil from Baghdad with imported gas and electricity from Tehran due to difficulties in paying Iran, Prime Minister Mohammed al-Sudani said.
• SOMO will handle the crude and fuel oil sales to companies nominated by Iran, the minister said.
• Although the implementation of the deal will take time, Iraq will most probably try to boost production from its southern mega fields to make up for the loss of output and continued suspension of exports via Turkey's port of Ceyhan, the SOMO source said.
• SOMO has yet to receive details on the start of the barter deal, the amount of crude and fuel oil that will be exported to Iran or the crude grades that will be sold, the source added.
• Iraq’s crude exports via its northern pipeline to the Turkish port of Ceyhan remain halted since 25 March.
• On June 25, Baghdad started receiving about 50kbpd from Kurdistan's Khurmala field as part of an agreement to give Kurdish crude to SOMO in return for payments to Erbil as mandated by 2023 fiscal budget, the source said.