by Dennis Marc H.

Late last night several reporters witnessed an attack 50 miles outside of Kirkuk on Iraq’s major oil export pipeline. Approximately 200 heavily armed and well-trained Jihadists managed to fight their way through the Kurdish protected security area and installed improvised explosive devices (IEDs) on the pipeline, detonating them shortly after 11.30pm local time. 

The blast left 10 Kurdish Pashmerga fighters dead, and caused huge oil leaks. The detonation was so strong that the pipeline is now disconnected and no oil can flow. Oil field engineers were quick to react and stop the flow of oil to prevent further ecological damage.

The Kirkuk-Ceyhan oil pipeline is Iraq’s largest oil pipeline which can export up to 300,000 barrels per day. In recent months only approximately 30,000 barrels per day have been flowing, but two weeks ago the pipeline was restored to full capacity, just in time before demand in Europe will increase due to the coming winter months. 

Damage to the pipeline is a further blow to authorities in Baghdad but also the Kurdish Regional Government and has far-reaching consequences for Iraq, which will loose major oil revenues through this sabotage. However the consequences are even worse for Turkey and Europe. 

Turkey earns a considerable amount of duties from this pipeline, as 99% of this oil is re-exported to Europe and the United States through the Turkish port in Ceyhan. Europe draws 8% of its oil imports from Iraq, and the stop of exports from Iraq through this pipelines will result in a huge deficit.

Bloomberg LP reports that the oil price reached a 2-months high, settling at $95 in London after market closure. Amid the pressures from OPEC, prices are likely to rise to over $100 in this coming week.