Israel has bought as much as three-quarters of its oil from Iraqi Kurdistan in recent months, the Financial Times reported Sunday.
According to the report, which cited shipping data, trading sources and satellite tanker tracking, Israeli refineries and oil firms have imported more than 19 million barrels of Kurdish oil over the course of three months, from the beginning of May to August 11.
The sales are reportedly worth $1 billion, which would prove a vital source of income to Iraq’s semi-autonomous Kurdish north as it fights Islamic State militants. More than a third of all northern Iraqi oil exports, shipped from the Turkish port of Ceyhan, are said to have gone to Israel during that time.
The report cited analysts as suggesting that Israel could be buying the oil at a discounted price, while others say this might be a way for Israel to support the Kurds financially.
Kurdistan Regional Government (KRG) officials denied selling oil to Israel.
“We do not care where the oil goes once we have delivered it to the traders,” a senior Kurdish government adviser was quoted as saying in the report. “Our priority is getting the cash to fund our Peshmerga forces against Daesh [ISIS] and to pay civil servant salaries.”
Israel began buying oil from northern Iraq in June 2014, Reuters reported at the time. The Liberian-registered SCF Altai tanker delivered a cargo of a million barrels of disputed crude oil from Iraqi Kurdistan's pipeline for the first time on June 20. The Iraqi government claimed that the oil belongs to Iraq and can only be sold through Iraq’s Petroleum Ministry.
Late last year the Iraqi government reached a deal with the Kurds to end the dispute over the Kurdish oil exports and civil service payments from Baghdad. The sides agreed to jointly export the oil. But Baghdad's payments to the KRG have been limited as the government struggled with a budget crisis. As a result, the KRG has sold more oil on its own.