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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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Business

Saudi Arabia: Mawani Announces Commencement of Container Terminal Operations at Jubail Port

Jubail Commercial Port. SPA
Jubail Commercial Port. SPA
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Saudi Arabia: Mawani Announces Commencement of Container Terminal Operations at Jubail Port

Jubail Commercial Port. SPA
Jubail Commercial Port. SPA

The Saudi Ports Authority “Mawani” has announced the commencement of container terminal operations at Jubail Commercial Port under a privatization contract with Saudi Global Ports (SGP), backed by private sector investments exceeding SAR2 billion ($533 million).

The new move is in line with the objectives of the National Transport and Logistics Strategy under Saudi Vision 2030, Mawani said in a statement on Wednesday.

“The commencement of operations comes as part of the implementation of the privatization contract signed between the two parties, which includes the development of infrastructure and the modernization of operational equipment,” it said.

“This includes increasing berth length from 1,000 m to 1,400 m, deepening berths from 14 m to 18 m, increasing the number of STS cranes from 6 to 10, and raising the number of RTG cranes from 13 to 29 automated, environmentally friendly cranes,” the statement added.

According to Mawani, the launch will increase the container terminal’s handling capacity from 1.5 million TEUs to 2.4 million TEUs annually, across an area of 460,000 square meters.

This will enable the terminal to accommodate large next-generation vessels, enhance operational efficiency, and reinforce Jubail Commercial Port’s position as a key logistics gateway supporting the Kingdom’s sustainable growth.

It will also strengthen operational integration with the Group’s terminals across the Eastern Coast ports.

Business

Germany Growth Forecasts Slashed as Mideast War Hits Economy

Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
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Germany Growth Forecasts Slashed as Mideast War Hits Economy

Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File

Leading economic institutes more than halved their growth forecast for Germany on Wednesday, warning that the energy shock caused by the Middle East war would hit Europe's top economy hard.

A group of leading institutes slashed their joint GDP growth forecast for 2026 to 0.6 percent, down from a September prediction of 1.3 percent.

Inflation is now forecast to rise to 2.8 percent, up from 2.0 percent, "weighing on household purchasing power".

"The energy price shock triggered by the Iran war is hitting the recovery hard," said economist Timo Wollmershaeuser of the Ifo institute, adding that increased government spending was nevertheless "preventing a stronger slide", AFP reported.

Oil and natural gas prices have surged since the end of February, when the United States and Israel attacked Iran, killed its supreme leader and plunged the Middle East into war.

Iran has since closed the Strait of Hormuz to ships of countries it considers allied with the US and Israel, effectively blocking a sea lane that normally transports about a fifth of the world's oil and liquefied natural gas.

Higher inflation in Germany would hit consumer spending, the institutes said, weighing on an already weak economy that has barely grown since a burst of pent-up demand after the Covid pandemic in 2022.

The government on Wednesday introduced rules allowing petrol stations to only raise prices once a day, at noon.

But motorist Sebastian, a 49-year-old estate agent who did not want to give his surname, told AFP at a Frankfurt petrol station that this was not enough to protect his spending power.

"Whether the price of petrol changes once a day or 10 times a day doesn't really matter," he said, adding it was "certainly not enough" to lower his costs.

Germany's economy, struggling with fierce Chinese competition in sectors from cars to chemicals, was in the doldrums even before US President Donald Trump last year imposed sweeping new tariffs before starting the Mideast war in late February.

Chancellor Friedrich Merz, who took office last May, vowed to borrow and spend hundreds of billions through a special infrastructure fund over coming years in what was dubbed a spending "bazooka" aimed at getting the economy back on its feet.

But the economists said that much of the money was simply paying for day-to-day spending.

"Government expenditure on consumption is rising much more sharply than investment," economist Oliver Holtemoeller of the Halle Institute for Economic Research said. "That was not the idea behind changing the financing rules."

The outlook for the longer term was also dire.

Citing low productivity, industrial decline and an ageing population, the institutes warned that Germany's economy would soon be unable to grow sustainably.

"We have also reassessed the structural changes in the German economy and, in particular, revised our forecast for industrial growth downwards," Wollmershaeuser said.

In an era when "demographic change is hitting with full force", he said, "potential growth will come to a standstill by the end of the decade, and we will have to get used to average GDP growth rates of zero percent".

Speaking to broadcaster Welt TV, Economy Minister Katherina Reiche said the government was working on reducing labour taxes and energy costs but that Germans would have to get used to working more over the course of their lives.

"We need to make this country vigorous again," she said. "Germany needs to get its will to win back."

Business

Dollar Falls for Second Day as Middle East Ceasefire Expectations Rise

US dollar bills (Reuters)
US dollar bills (Reuters)
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Dollar Falls for Second Day as Middle East Ceasefire Expectations Rise

US dollar bills (Reuters)
US dollar bills (Reuters)

The dollar dropped for a second day on Wednesday as expectations of a ceasefire in the Middle East conflict grew after the US signalled that an end to the war could be near, even though markets remained on edge on fears of escalation.

The White House said US President Donald Trump would address the nation "to provide an important update on Iran" at 9 p.m. EDT on Wednesday (0100 GMT on Thursday).

Trump said on Tuesday the US could end its military campaign against Iran within two to three weeks, while Secretary of State Marco Rubio told Fox News Washington could see the "finish line" in the Iran war, according to Reuters.

Expectations that a ceasefire could be near have reversed some of the most popular trades since the war began in late February.

The yen recovered from this year's low of 160.46 per dollar, moving back through the psychologically important 160 level that had fanned concerns about intervention by Japanese authorities. The euro hit its highest level in a week.

The dollar index, which measures the currency against a basket of currencies including the yen and the euro, was last down 0.3% at 99.456, slipping to a one-week low after a 0.65% fall on Tuesday.

"Markets are increasingly buying into the notion of de-escalation in the Middle East overall," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank.

"Markets are optimistic. We're seeing some relief with rates going lower, equities going higher and the price action in euro-dollar reflects that quite well."

The euro edged up 0.5% versus the dollar to $1.1603, after rising 0.8% on Tuesday.

The Japanese yen was up 0.1% at 158.46 per dollar. Sterling strengthened 0.7% to $1.3313.

At the same time, there were still signs of escalation in the conflict.
US Defense Secretary Pete Hegseth said the next few days in the war against Iran would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.

The dollar should remain supported by the Fed's cautious stance on rate cuts, while the yen is being underpinned by rising expectations of a Bank of Japan hike in April, said Sho Suzuki, market analyst at Matsui Securities.

"We may see a tug-of-war between dollar strength and yen strength, with USD/JPY trading sideways in the upper 150s," he said.

The Australian dollar strengthened 0.7% to $0.6946. New Zealand's kiwi strengthened 0.4% to $0.5770.