New KRG policy shifts oil price risk onto IOCs

An oil jetty at the Mediterranean port of Ceyhan in Turkey, photographed in September 2003. (YORAY LIBERMAN/Getty)

The Kurdistan Regional Government (KRG) has updated the formula that international oil companies use to calculate their invoices — part of an effort to pass off some of the financial risks stemming from volatile global oil prices and Iraq's fractious politics.

The new policy appears to come in response to a drop in the value of KRG crude when compared to international Brent benchmark prices. According to data released by the KRG, Kurdistan blend crude (KBT) has been selling at an increasingly steep discount in recent months.