Kurdish government says oil contracts viable

ERBIL, Iraq, June 20 (UPI) -- The semiautonomous Kurdish government in northern Iraq said it's delivering oil to its customers under contracts that are commercially viable.

Two vessels loaded with oil from the Kurdish north of Iraq have left the Turkish port of Ceyhan in recent weeks. The export is a source of contention between the federal government in Baghdad, which says unilateral Kurdish action is illegal, and the Kurdistan Regional Government, which says it's operating according to the rule of law.

The KRG issued a statement Thursday saying it's selling its oil through a pipeline system to Ceyhan on an international commercial market basis.

"The KRG has been able to deliver oil to its customers under commercially viable contracts, and all payments are being made into the KRG's account in Turkey," the Kurdish Ministry of Natural Resources stated. "Export volumes are expected to double within the next weeks."

The U.S. government, which is reviewing how best to help Iraq deal with a growing insurgency, said it opposed the sale of Kurdish oil absent Baghdad's consent.

The KRG accused the federal State Oil Marketing Organization of having an "illegal monopoly over Iraq's oil sales."