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Iraqi Kurdistan Region’s Oil Output at Risk after Türkiye Halts Pipeline Exports

An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
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Iraqi Kurdistan Region’s Oil Output at Risk after Türkiye Halts Pipeline Exports

An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)

Oil production in Iraq's semi-autonomous Kurdistan region (KRI) is at risk after a halt in northern exports has forced firms operating there to cease output or divert crude to storage, where capacity is limited.

Iraq was forced to halt around 450,000 barrels per day (bpd) of crude exports, or half a percent of global oil supply, from the KRI on Saturday through an export pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan.

Oil firms in the region have been left in limbo as the pipeline stoppage is set to continue until Ankara, Baghdad and the KRG find a settlement to resume exports.

Türkiye stopped pumping Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Türkiye had violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil to Ceyhan without Baghdad's consent.

The news supported crude prices, with Brent rising over $3 per barrel on Monday.

Canada-based Forza Petroleum, formerly Oryx Petroleum Corporation, said on Monday it was shutting in production from the 14,500 bpd Hawler license in the KRI as storage was nearing full capacity.

Dallas-based HKN Energy, which operates the Sarsang block, said it would shut in operations "within a week if no resolution is reached" as its storage facilities approach capacity.

The block produced 43,038 bpd in the fourth quarter of last year.

HKN wrote to US representatives last year warning that a cessation of exports through the pipeline would trigger a collapse of the KRI economy.

Gulf Keystone Petroleum, which operates the 55,000 bpd Shaikan field in the KRI, said in a statement on Monday that its "facilities have storage capacity that allow continued production at a curtailed rate over the coming days, after which the company will suspend production".

DNO and Genel Energy said they were storing oil in tanks, which can accommodate several days of production.

The two firms hold stakes in the Tawke and Peshkabir fields, which produced 107,000 bpd of oil last year.

Genel also holds stakes in the Taq Taq and Sarta fields, which produced a respective 4,500 bpd and 4,710 bpd last year, according to the company's annual results.

Production at the Khurmala oil field run by Kurdish group Kar was unaffected at around 135,000 bpd and heading into tank, a source familiar with the field operations told Reuters.

Shamaran Petroleum said in a statement: "The company will remain in close contact with the other oil producers in the Kurdistan Region and with relevant government officials, and will continue to monitor this situation closely."

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Trump Says he’s Terminating Trade Talks with Canada over Tax on Tech Firms

Canadian Prime Minister Mark Carney speaks during a press conference during a NATO summit in The Hague, Netherlands June 25, 2025. REUTERS/Toby Melville
Canadian Prime Minister Mark Carney speaks during a press conference during a NATO summit in The Hague, Netherlands June 25, 2025. REUTERS/Toby Melville
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Trump Says he’s Terminating Trade Talks with Canada over Tax on Tech Firms

Canadian Prime Minister Mark Carney speaks during a press conference during a NATO summit in The Hague, Netherlands June 25, 2025. REUTERS/Toby Melville
Canadian Prime Minister Mark Carney speaks during a press conference during a NATO summit in The Hague, Netherlands June 25, 2025. REUTERS/Toby Melville

President Donald Trump said Friday that he’s suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called “a direct and blatant attack on our country.”

Trump, in a post on his social media network, said Canada had just informed

the US that it was sticking to its plan to impose the digital services tax, which applies to Canadian and foreign businesses that engage with online users in Canada. The tax is set to go into effect Monday.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump said in his post.

Trump’s announcement was the latest swerve in the trade war he’s launched since taking office for a second term in January. Progress with Canada has been a roller coaster, starting with the US president poking at the nation’s northern neighbor and repeatedly suggesting it would be absorbed as a US state.

Canadian Prime Minister Mark Carney said Friday that his country would “continue to conduct these complex negotiations in the best interests of Canadians. It’s a negotiation.”

Trump later said he expects that Canada will remove the tax, The Associated Press reported.

“Economically we have such power over Canada. We’d rather not use it,” Trump said in the Oval Office. "It’s not going to work out well for Canada. They were foolish to do it.”

When asked if Canada could do anything to restart talks, he suggested Canada could remove the tax, predicted it will but said, “It doesn’t matter to me.”

Carney visited Trump in May at the White House, where he was polite but firm. Trump last week traveled to Canada for the G7 summit in Alberta, where Carney said that Canada and the US had set a 30-day deadline for trade talks.

The digital services tax will hit companies including Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving US companies with a $2 billion US bill due at the end of the month.

“We appreciate the Administration’s decisive response to Canada’s discriminatory tax on U.S. digital exports,” Matt Schruers, chief executive of the Computer & Communications Industry Association, said in a statement.

Canada and the US have been discussing easing a series of steep tariffs Trump imposed on goods from America’s neighbor.

The Republican president earlier told reporters that the US was soon preparing to send letters to different countries, informing them of the new tariff rate his administration would impose on them.

Trump has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. He is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period he set would expire.

Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 US-Mexico-Canada Agreement signed during Trump’s first term.

Addressing reporters after a private meeting with Republican senators Friday, Treasury Secretary Scott Bessent declined to comment on news that Trump had ended trade talks with Canada.

“I was in the meeting,” Bessent said before moving on to the next question.
About 60% of US crude oil imports are from Canada, and 85% of US electricity imports as well.

Canada is also the largest foreign supplier of steel, aluminum and uranium to the US and has 34 critical minerals and metals that the Pentagon is eager to obtain.

About 80% of Canada’s exports go to the US.

Daniel Beland, a political science professor at McGill University in Montreal, said it is a domestic tax issue, but it has been a source of tensions between Canada and the United States for a while because it targets US tech giants.

“The Digital Services Tax Act was signed into law a year ago so the advent of this new tax has been known for a long time,” Beland said. "Yet, President Trump waited just before its implementation to create drama over it in the context of ongoing and highly uncertain trade negotiations between the two countries.”