A row about late payments has led to the suspension of oil exports to Iraq from its autonomous Kurdish region.
After a deal struck last year, the Kurds are meant to send oil to Baghdad, which will then be sold on the international market, with each side taking half of the profit.
However, Baghdad is accusing the Kurds of cheating to avoid the profit-share, which, it claims, negatively impacts the national budget.
Describing what the Baghdad government believes is happening, Iraq’s Minister of Oil Abdul Kareem Luaibi said: “We have indications and detailed reports on the border points used to smuggle crude from the region towards Iran and most of the smuggled crude goes through Iraqi borders, through the Gulf ports of Bandar Abbas and Khumaini Port and are sold at prices much lower than the international standard.”
Baghdad is accusing the northern region of witholding more than four billion euros made from illegal sales.
Adding pressure to an already tense relationship, the Kurdish regional government claims it is owed ten months’ worth of payments, and will not resume exports until the bill is settled.