Peregraf
The Undersecretary of the Iraqi Ministry of Oil for Extraction Affairs, Basem Mohammed Khudair, announced today that Iraq will initially receive 185,000 barrels per day (bpd) of oil from the Kurdistan Region as a first stage after the long-awaited resumption of oil exports through Turkey’s Ceyhan port. The exported volume is expected to gradually increase to 400,000 bpd, in line with the Federal Budget Law.
Khudair told Al-Iraqiya TV News, that the prolonged suspension of exports had severely impacted Kurdistan’s oil fields, necessitating a period of rehabilitation to restore full production capacity. “Currently, the available production in the region stands at 300,000 bpd, with a portion allocated for domestic consumption and the remaining 185,000 bpd designated for export,” he said.
A recent visit by an Iraqi Oil Ministry delegation to Erbil led to an agreement to form joint technical committees overseeing the resumption process. Khudair confirmed that teams from the North Oil Company and the Kurdistan Regional Government (KRG) are actively inspecting pipelines to ensure they are ready for oil flow. Meanwhile, Iraq has formally inquired with Turkey about the operational status of the Ceyhan pipeline, with an official response expected within 24 hours.
KRG Confirms Agreement with Baghdad
The KRG’s Ministry of Natural Resources also confirmed today that an agreement has been reached with the Federal Ministry of Oil to restart exports. “After extensive coordination, we have agreed to resume oil exports according to available quantities,” the ministry stated. A joint technical team has been formed to oversee pipeline inspections, ensuring a smooth transition back to full exports.
However, Kurdistan officials have emphasized the need for an agreement with Baghdad on domestic oil allocations before restarting full-scale exports. In a statement following a meeting on February 18, the KRG Negotiating Delegation underlined that any oil export resumption must factor in the region’s internal needs. The delegation insisted that the domestic oil allocation must be comparable to other Iraqi regions, ensuring fair distribution before SOMO (Iraq’s state-run Oil Marketing Company) takes full control of Kurdistan’s oil exports.
Iraq Finalizes Export Readiness as U.S. Pressures Baghdad
The Iraqi Oil Ministry announced yesterday that it had completed all necessary procedures to restart exports in line with the Federal Budget Law and Iraq’s OPEC production commitments. The ministry urged the KRG to deliver the agreed volumes to SOMO, which will manage exports under existing contracts.
Meanwhile, the United States is reportedly increasing pressure on Iraq to resume Kurdistan’s oil exports amid allegations of widespread oil smuggling to Iran. According to sources cited by Reuters, Washington is concerned that approximately 200,000 bpd of discounted crude has been smuggled from Kurdistan to Iran and Turkey since the Ceyhan pipeline closure in March 2023. U.S. officials estimate that this illicit trade generates over $1 billion annually, benefiting Iran and its regional allies.
An Iraqi oil official confirmed that Washington prefers Kurdistan’s oil to be legally exported to global markets rather than sold at lower prices to Iran. The issue has also raised concerns about transparency in oil revenues and their return to the KRG treasury, as financial disputes between Erbil and Baghdad have exacerbated Kurdistan’s economic crisis, leading to delayed salary payments and growing public unrest.
New Budget Amendment Paves Way for Long-Term Solution
In a significant legislative development, Iraq’s parliament passed a budget amendment on February 2, 2025, later signed into law by the Iraqi president. The amendment sets the production and transportation cost for Kurdistan’s oil at $16 per barrel, with Iraq’s Ministry of Finance covering the expenses. Kurdish MP Dilan Ghafoor told Peregraf that this rate is temporary and will be reassessed by an independent firm within 60 days.
The KRG and international oil companies operating in Kurdistan have welcomed the amendment, seeing it as a crucial step toward long-term stability. However, experts caution that financial and logistical challenges must be swiftly addressed to prevent further delays in exports.
As one of OPEC’s largest oil producers, Iraq’s ability to restore full export capacity is under close international scrutiny, especially as global oil markets react to ongoing price fluctuations. The coming days will determine whether the agreement between Baghdad and Erbil can translate into a sustainable solution or if new political and financial disputes will emerge.