Iraq cuts oil product supplies to Kurdish region

Iraq's Oil Ministry has cut supplies of some fuel products to the northern Kurdish region by 50 percent in response to the Kurds selling what they say is excess kerosene, fuel waste and naptha to Iran, officials said. The move threatened to aggravate already tense relations between Iraq's minority Kurds and the Arab-led government in Baghdad, at a time when U.S. forces which have acted as a buffer between the two since the 2003 invasion are starting to leave. The decision to cut supplies to the semi-autonomous Kurdish Regional Government was ordered by Oil Minister Hussain al-Shahristani, Oil Ministry documents obtained by Reuters showed. "Based on instructions from the oil minister, it was decided to cut the allocation of kerosene and diesel fuel sent to provinces in the Kurdish region by 50 percent until further notice," one document said. An Oil Ministry official who declined to be named said the decision was taken in response to an acknowledgement last month by Kurdish natural resources minister Ashti Hawrami that the region was selling surplus oil products to private companies. Those private companies were exporting the products through neighbouring Iran, a challenge to U.S. efforts to impose sanctions on Iran. The exports have put further strains on Kurd-Arab relations.