Ukrtatnafta, operator of the Kremenchug Oil Refinery, Ukraine's largest, imported 586,400 barrels of Kirkuk oil this year, said Sergey Kuyun, executive director of the Ukraine energy consulting firm UPECO.

"Stiffer competition on the Ukrainian fuel market is forcing producers to diversify their resource base, and traders to diversify the sources of oil product deliveries," he told a news conference, Interfax reports.

While the company usually uses Russian and domestic oil for the refinery, its Russian supply was squeezed, the Trend News Agency reports, adding Kirkuk is similar in quality to the Russian Urals crude brand.

Iraq production has risen of late from the post-war average of 2 million barrels per day to 2.3 million bpd in December. Last month production dropped again. The growth was due to increased security around its northern infrastructure, sending Kirkuk oil to a Turkish port.