Increased likelihood of budget deal with Iraqi central government lowers non-payment risks for contracts awarded by KRG

14 December 2018


On 5 December 2018, the Iraqi government decided to withdraw all employees from its customs checkpoints between the Kurdistan Region and government-controlled provinces of Kirkuk and Nineveh, which had been recently established following the government's recapture of KRG-controlled disputed territories in Kirkuk and Nineveh in late 2017.

This came after the resumption on 16 November, reportedly under US pressure, of federal oil exports from Kirkuk through the Kurdistan Regional Government (KRG)-controlled tie-in to the Iraq-Turkey pipeline, the sole operational oil export route out of Kirkuk. Federal oil exports from Kirkuk had been halted since its recapture by government. With a standoff between the two sides preventing a deal, the government had devised the stopgap measure of trucking the Kirkuk oil to Iran, but had to curtail this with US sanctions on Iran coming into force as of 4 November.

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