After the Iraqi Prime Minister’s announcement on July 10th, there was a quick turn of events. Within twenty-four hours, the Prime Minister had issued a statement regarding a barter deal with Iran for the country’s crude and black oil in exchange for Persian gas. The deal was made in conjunction with the Qatari-Turkmenistan coup and the approval to import gas from the Iraqi “Kormor” field. While the motive behind this trade-off may seem unclear, some experts believe that it will help Iran maintain control over the Iraqi gas market and increase its black oil stocks.
President Muhammad Shia al-Sudani recently announced the approval to import gas from the Iraqi “Kormor” field. The field is considered a “free” gas field and is located in Sulaymaniyah. This means that the extraction of gas is not associated with the extraction of oil. Despite the barter deal with Iran, the Iraqi government claims to have reached gas sufficiency. However, official statements about oil and electricity in Iraq have been questionable in the past. The purchase price of Iranian gas remains unknown, and some experts believe it may be considered unfair.
It’s interesting to consider the motives behind the barter deal and gas purchase from Kormor. Perhaps these transactions can shed light on the intentions of the first party and what they hope to achieve. It’s clear that a close relationship between Tehran and Al-Yakti has the potential to create tensions with the Iraqi government, particularly given past comments from former Prime Minister Nuri al-Maliki. Despite these challenges, it will be important to carefully consider the potential outcomes of these deals to gain a deeper understanding of their significance.The barter deal, and the purchase of gas from Kormor, are both suitable to be a pipeline, to pass some understanding, about the motives of the first, and some of the expected results from its application. So what is the motive behind a trade-off that seems to hit the feet of analysis with a “flat foot” and renders it incapable of moving the body of understanding?
The close relationship between Tehran and Al-Yakti was able to hit the Iranian wall with the Iraqi constitution, especially since the former Iraqi Prime Minister Nuri al-Maliki had ridiculed the possibility of the region exporting gas.
It’s worth examining the potential consequences of Tehran’s use of Iraqi oil, specifically regarding gasoline imports. According to a spokesperson for Iranian customs, Ruhollah Latifi, Iraq has imported around 34 thousand tons of gasoline from March to June. This amount is nearly enough to cover the Iraqi monthly deficit, which is estimated to be around 15 million liters by the Iraqi National Oil Company. However, Iraq’s actual monthly need for gasoline is around 30 million liters, meaning that they still require a significant amount of imports to meet their demand.Iraq, according to the data of this institution, imported $3 billion worth of oil derivatives in 2021, in order to cover the local demand for them. In addition to Iraq spending $2.1 billion in subsidies for oil products, especially gasoline and white oil.
According to my understanding, Iran exports approximately 3 million liters of diesel fuel to Iraq, although it remains uncertain whether they have achieved their goal of exporting 5 million liters to the country. In my recent conversation with Louay Al-Khatib, who previously held the Ministry of Electricity portfolio under former Prime Minister Adel Abdul-Mahdi, it was revealed that government support for the electricity sector amounted to $20 billion in 2023. It seems that the government’s support for the electricity sector, as well as oil derivatives, is a significant source of funding with plenty of opportunities for Iranian businesses.
It appears that in a recent barter deal, Iran will be controlling more government subsidies for the electricity sector in Iraq. This increase in control will happen through the local “brokerage companies” that buy fuel from the Iraqi government to resell it to the Iraqi Ministry of Electricity, thus giving Iran control over the electricity market. The deal seems to be a significant source of funding and opportunities for Iranian businesses. However, the deal also allows Iran to market more of its black oil under the cover of the Iraqi counterpart, leading to suspicions of fraud. It is also likely that Iran will use the deal to expand its share of the electricity it sells to Iraq. The purchase of gas from Iraq’s Kormor field is also part of the deal, giving Iran a legal precedent to deal with Iraqi gas fields as pure property. The purchase price of Iranian gas, however, remains a mystery, and some experts consider it to be unfair. Despite the uncertainty surrounding the deal, official statements about oil and electricity in Iraq in general are often unreliable.