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Two sources claim that talks on restarting Iraqi Kurdish crude oil exports have hit a snag.

Two sources who have direct knowledge of this matter, but spoke on the condition of anonymity, said that the talks to restart Kurdish crude oil exports via the Iraq-Turkey pipe are at a standstill due to a lack in clarity regarding payments and contracts.

Negotiations, which began in late February, failed to resolve a standoff of nearly two years that had halted the flow of goods from Iraqi Kurdistan, in the northern part of the country, to Turkey's Mediterranean Port of Ceyhan.

Last month, it was reported that the Trump administration has asked Iraq for a restart of the shipments or sanctions.

The Ministry of Oil has not responded to requests for comments on the discussions.

Two sources confirmed that the oil ministry sent a letter on Thursday to the Kurdish government asking them to appoint an independent consultant who would assess the costs of production and transport from each field in order to establish prices.

Baghdad has not yet agreed on the scope of the work that the consultant would undertake. This, according to the sources, casts doubt on Baghdad’s commitment to honour the existing contracts between the oil companies and the Kurdistan Region.

One source said, "There's no agreement on the methodology yet. So the fear is that at some point the companies won't know what they will be paid for their product as the consultant could change everything."

APIKUR, an association of eight oil companies operating in Iraqi Kurdistan said in a joint statement that it would not resume its exports until Baghdad made a firm commitment of honouring existing contracts and providing surety for payment of past and future exports.

The APIKUR statement, which made an apparent reference towards the letter in question, said that the oil ministry was unwilling to "negotiate a solution honoring the IOC contract sanctity" and was trying to establish a different process unilaterally.

The statement read: "These actions of the Ministry of Oil is not acceptable."

DNO, Genel Energy and Gulf Keystone Petroleum are among the oil producers in Kurdistan.

Washington wants to restart the flow via Turkey partly to boost supply globally and lower prices. The U.S. wants to stop financial ties between Iraq, and Iran. This is in order to apply pressure on Tehran regarding its nuclear program and oil exports.

Iraq is a vital ally for the U.S., Iran and the world. It helps Iran maintain its economy in the face of international sanctions.

Baghdad does not want to be caught up in the U.S. President's plan to squeeze Iran, according sources. (Reporting and editing by Gareth Jones, Jan Harvey and Maha El Dahan)

(source: Reuters)