Iraq resumes Kurdish oil exports to Turkiye after two-and-a-half-year halt

Following a two-and-a-half-year deadlock caused by legal and technical issues, Iraq resumed its exports of crude oil to Turkiye from the semi-autonomous Kurdistan region.

According to a statement from the Iraqi oil ministry on Saturday, the resumption of operations was at 6am local time (03:00 GMT). The ministry claimed that “operations started at a quick pace and with complete smoothness,” and that no significant technical issues were found.

Alparslan Bayraktar, the minister of energy in Turkey, provided additional confirmation in a post on X.

The agreement between Iraq’s federal government, the Kurdistan regional government, and regional oil producers operating in the area will allow the flow of 180, 000 to 190, 000 barrels of crude to Turkiye’s Ceyhan port, according to the oil minister’s statement to Kurdish broadcaster Rudaw on Friday.

Following a tripartite agreement reached earlier this week between the ministry, the ministry of natural resources, and international oil companies operating in the area, the resume is scheduled to resume.

At a time when the Organization of Petroleum Exporting Countries (OPEC) is increasing output to increase market share, the United States had pushed for a restart, which is anticipated to eventually bring up 230, 000 bpd of crude back to international markets. In a statement, US Secretary of State Marco Rubio praised the agreement, saying it “will bring tangible benefits to both Americans and Iraqis.”

According to state news agency INA on Saturday, Iraq’s OPEC delegate, Mohammed al-Najjar, said his nation can export more than it can now now, in addition to other planned projects at Basra port, according to the state news agency INA.

He claimed that “OPEC member states have the right to demand an increase in their production shares, especially if they have projects that have increased production capacity.”

The region’s Kurdistan-based businesses will receive $ 16 per barrel to cover production and transportation costs. Within 30 days of exports, the eight oil companies that signed the agreement and the Kurdish government have agreed to meet to discuss a solution to settle the $1 billion debt the region owes to the firms.

Baghdad and Erbil have been at odds with one another over their lucrative oil exports, with the agreement being seen as a step toward stabilizing the relationship between Baghdad’s central government and the Kurdish region and raising Iraq’s oil revenues.

Prior to now, the Kurdish authorities independently sold oil exports through the port of Ceyhan in Turkiye, without the federal government’s approval or oversight.

The International Chamber of Commerce in Paris ordered Turkiye to pay $ 1.5 billion in damages to Iraq for unauthorised exports by the Kurdish regional authorities in March 2023, which was the reason the Kirkuk-Ceyhan pipeline was shut down.