Iraqi oil ministry dismisses letter by US lawmakers as ‘baseless allegations’

BAGHDAD — The Iraqi Ministry of Oil responded Sunday to a letter sent by members of the U.S. Congress to President Joe Biden, describing the allegations against senior Iraqi officials as “baseless.” The ministry expressed surprise at the timing of the statements, which coincides with the upcoming visit of Oil Minister Hayan Abdul Ghani to Washington, and challenged the lawmakers to provide evidence supporting their claims.

In the letter to Biden, five Republican members of Congress accused Abdul Ghani and other senior Iraqi oil officials of involvement in schemes allowing Iran-aligned groups to evade sanctions and generate revenue from illicit oil sales. The lawmakers called for an investigation into these claims and suggested sanctioning individuals and entities if the allegations are verified. They also raised concerns over potential misuse of Iraq’s access to U.S. dollars to assist Iran in circumventing sanctions.

With a presidential election approaching, such letters often serve domestic political purposes, allowing Republicans to showcase a tough stance on foreign policy and national security, particularly regarding Iran, to their conservative voter base.

Full statement from Iraq’s Ministry of Oil:

Response to the letter from some U.S. congress members to President Biden regarding allegations concerning the Iraqi oil sector:

We would like to clarify from the outset that everything stated in the letter is baseless. The only truth is the word “allegations,” as it contains no facts or credible information.

Iraq is committed to the highest standards of transparency in the production and export of oil. All related data is regularly and thoroughly published through official channels. The Ministry of Oil deals exclusively with a select number of reputable international companies, including American firms, in both production and marketing. Iraq maintains strong relationships and partnerships with these companies that span decades, involving investment in oil fields across various regions of Iraq and adherence to international transparency standards in marketing Iraqi crude oil.

The claims made in the letter regarding Iraq’s role in helping Iran evade sanctions are also mere allegations with no basis in reality. Iraq engages with Iran in the energy sector, including the import of gas and electricity, in coordination and understanding with its friends in the United States. These dealings are conducted openly, with transparent and declared contracts, including both imports and the settlement of dues owed to the Iranian side. Iraq respects its international obligations, complies with international law, and builds its relationships with neighboring and other countries based on mutual respect and shared interests in line with international laws, steering clear of any involvement in activities that would violate them.

As outlined above, the Iraqi oil sector is closely monitored by regulatory authorities and subjected to stringent audit procedures, including the export contracts for crude oil and petroleum products like black oil. These are governed by transparent mechanisms in compliance with governmental laws and regulations, debunking allegations of fraud and funding so-called militias. The ministry’s engagement with security entities is governed by constitutional legal texts, and no entity can exert pressure on the ministry.

The Ministry of Oil expresses its surprise and dismay at the contents of the letter suggesting the involvement of certain officials in oil smuggling and budget manipulation. We reject these accusations in the name of Iraq, entirely and unequivocally, and challenge anyone to provide evidence supporting such claims. The ministry, under the leadership of Minister Hayan Abdul Ghani, operates with the utmost integrity and transparency. Export operations are conducted through globally recognized official ports, namely Basra Port in Iraq and Ceyhan Port in Turkey, under the supervision and monitoring of international institutions (KPLER), which provide precise data on quantities, quality, and shipping vessels. Any party can verify and match this data, which also disproves claims regarding the smuggling of Iranian oil as Iraqi oil, or the mixing and smuggling through Iraqi oil outlets, where all movements and activities are overseen by international inspectors contracted by the Ministry of Oil. At the same time, Iraq’s territorial waters are firmly controlled and strictly monitored by the Iraqi Navy.

Iraq bears no responsibility for events that may occur beyond its territorial waters, as Iraqi oil contracts are based on Free on Board (FOB) terms, and the responsibility of the State oil marketing company (SOMO) ends once the oil is loaded onto the vessel.

The claims regarding a connection between oil and dollars in favor of Iran are unfounded. Iraq is one of the most committed countries to international regulations governing the trade of oil and currencies, and we deny any secret or illegal transactions that would enable others to circumvent regulations through Iraq. It is well-known and publicly declared that all oil revenues pass through the U.S. Federal Reserve.

In conclusion, the Ministry of Oil is puzzled by the recurring nature of these allegations, often surfacing near the time of each high-level Iraqi official’s visit to the United States. It appears that those who write these allegations are displeased by the development of strong relations and cooperation between two friendly countries bound by an important framework agreement encompassing all fields.