Iraq to Resume Oil Exports from Kurdish Region After Historic Agreement

Iraq will restart the export of oil from its Kurdish region to Turkiye after more than two years of stoppage. This follows a historic agreement between Iraq’s federal government in Baghdad and the Kurdistan Regional Government (KRG), announced by Iraqi Prime Minister Shia al-Sudani.

Agreement Details

Under the agreement, Iraq’s state oil company, SOMO, will manage the export of crude oil from the Kurdish oil fields through the Kirkuk-Ceyhan pipeline to Turkiye. The Kurdish regional authorities confirmed that oil exports will resume within 48 hours.

The deal involved a tripartite understanding between Iraq’s oil ministry, the KRG Ministry of Natural Resources, and oil-producing companies. Eight major oil companies operating in Iraqi Kurdistan, which account for over 90 percent of the region’s production, also agreed to the plan in principle.

Background

Oil exports through the Kirkuk-Ceyhan pipeline had been shut since March 2023. The closure came after the International Chamber of Commerce ordered Turkiye to pay Iraq $1.5 billion for unauthorized exports conducted by the Kurdish authorities. This led to a halt in oil flows for more than two years, affecting both Iraq’s revenue and regional energy supply.

Before the stoppage, Iraq was exporting about 230,000 barrels per day through this pipeline. The new agreement specifies that all oil from Kurdistan fields, except what is needed for local use, will be delivered to SOMO for export. Turkiye has said it is ready to reopen the pipeline, while appealing the ICC compensation order.

Significance of the Deal

This historic agreement is important for Iraq’s economy, as oil exports are a major source of revenue for the country. It also signals improved cooperation between Iraq’s federal government and the Kurdish region, which have had disputes over oil control for years.

The restart of Kurdish oil exports will also impact the global oil market, as Iraq is one of the world’s top oil producers. The pipeline to Turkiye is a key route for delivering oil to international buyers in Europe and beyond.

Disclaimer:

This article is based on official statements and publicly available information. It is intended for informational purposes only and reflects events at the time of publication.