Analysis: Who's cashing in on the KRG oil smuggling operations?
We've talked about the Barzani and Talabani families raking in millions each month from under-the-table KRG oil sales which is now about 350,000 barrels per day. But let's dig deeper into who else might be getting a piece of this lucrative pie:
1. The oil passes through a network of intermediaries, each taking a cut of the profits along the way.
2. Foreign companies are still profiting from this trade, even after the official sale of oil via the KRG pipeline was halted following an international arbitration court ruling. Notably, many of these foreign companies operating in the KRG are often obscure entities with questionable ownership, primarily active only in the Kurdistan Region.
3. Currently, over 90% of oil production occurs in KDP-controlled areas, suggesting the Barzani family is likely earning substantially more than mere tens of millions monthly.
4. Beyond major refineries like Lanaz and Kar (directly benefiting the Barzani family), smaller refineries also profit. These are often owned by associates and extended family members of the Barzanis. Despite operating without licenses and causing significant pollution, they remain open, seemingly immune to intervention from the Erbil governor.
5. A significant portion of this oil is transported to Iran through PUK territory. The PUK benefits in two key ways: a) They charge a fee called 'manefisto', which goes directly to the PUK's general administration and treasury, controlled by the Talabani brothers. b) The majority of oil tankers transporting oil from Sulaimani to Iran are reportedly owned by a PUK-linked company called Southern Kurdistan, which also operates in the Kor Mor natural gas fields.
6. Iran's involvement raises questions about how such a tightly controlled regime allows this smuggling to flourish. It's highly probable that powerful officials within the Iranian regime, possibly within the IRGC, are also profiting significantly from this trade.
7. The oil typically ends up in the UAE, but now also reaches countries like Afghanistan, Pakistan, and Turkmenistan, with a significant portion reportedly destined for China. This mirrors the path of much of Iran's sanctioned oil.
8. Other notable actors include: a) Kurdish-British politician Nadhim Zahawi, who is allegedly involved once the oil reaches the UAE. b) There are suspicions that some of this oil may end up in Israel, which previously sourced one-third of its oil from the KRG between 2014-2023.
9. Two critical questions remain: a) Why is Iraq silent on this matter, despite being fully aware of the situation, which has even been reported by International media agencies such as Reuters? b) More importantly, why is the US not addressing this issue, given that it likely violates US-imposed sanctions on Iran?