Basra crude is being pushed north to Ceyhan as imports into Iraq fall 29 percent

Oilprice.com reported on 3 November that Iraq has raised crude exports through Turkey’s Ceyhan port to 500,000 barrels per day by moving southern crude northward to bypass shipping disruption in the Strait of Hormuz, which the same report dates to March 2026. Oilprice is a trade aggregator rather than a wire, and a figure carrying this much weight needs confirmation against SOMO’s monthly statement or a price-reporting agency before it is treated as fact. The direction, however, is the point. On 3 March Bloomberg reported, citing people with direct knowledge, that Baghdad had halted Kurdish exports to Ceyhan, shutting in roughly 200,000 bpd; flows resumed in mid-March under a Baghdad–Erbil agreement announced by the oil minister through state media. The two numbers are not like for like — the March figure is Kurdish crude, the November figure appears to include rerouted southern barrels — but the line that was once the Kurdistan Region’s leverage instrument is now carrying federal cargo.

The fiscal picture underneath is worse than the export picture. The economist Manar al-Obaidi, citing official customs data, said on 1 November that exports to Iraq from six of its largest trading partners fell by $9.6 billion in the first half of 2026 against the same period of 2025, a drop of 29 percent; the figures were reported by Shafaq News on 2 November, and the six partners were not enumerated. Shafaq has separately reported that Iraq spent about 44.627 trillion dinars, roughly $34.1 billion, on public-sector salaries and social welfare in the first half of the year — close to 82 percent of total federal spending. In late June a member of parliament’s finance committee, unnamed in the report, said the government was unlikely to submit a 2026 federal budget at all and was turning to the 2027 plan. That was four months ago and has not been refreshed here.

Assessment: If the Ceyhan number holds, the political meaning of the Kirkuk–Ceyhan pipeline has inverted. For a decade it was the asset Erbil could switch off; a line carrying Basra barrels around Hormuz is federal strategic infrastructure, and the Kurdistan Region’s share of a contested pipe buys less than it did in 2025. Read the import collapse with care: a 29 percent fall in what partners ship into Iraq is consistent with demand destruction, with payment and dollar-clearing friction, or with trade rerouting through unrecorded channels, and customs data cannot distinguish them. What is not in doubt is the squeeze — an 82 percent salaries bill and no budget law to allocate against. That vacuum is where Erbil’s transfer fight and the militia payroll question meet.