Reuters reported that Kurdistan has made independent export deals for its oil and in doing so has pitted itself against Baghdad, which believes it should have total control over Iraq’s oil and asserts that deals made with Kurdistan are illegal.
As quoted in the market news:
The move is likely to enrage the [Iraqi] government, which is still locked in a battle with Exxon Mobil over its independent deal with Kurdistan last year to explore for oil in six Kurdish blocs. But it also paves the way towards greater Kurdish autonomy as Baghdad has long insisted it alone has the right to market Iraqi oil and gas products.
By involving two of the world’s largest trading houses, Trafigura and Vitol, Kurdistan has made it difficult for Baghdad to retaliate, as it depends on those firms for a proportion of its refined oil imports like gasoline and diesel. If Baghdad were to decide to shop elsewhere, it could face paying much higher prices for its fuel.