Peregraf
Iraq is waiting for the Kurdistan Region to approve the resumption of oil exports to Turkey, as financial disputes with international oil companies continue to stall negotiations.
Bassem Mohammed Khzair, Iraq’s deputy minister of oil for extraction affairs, confirmed that Turkey has completed inspections of the oil pipeline from the Kurdistan Region to the Ceyhan port and is ready to receive oil. “The Oil Ministry has fulfilled all its obligations. We are waiting for the Kurdistan Region to give the green light to set a deadline for oil exports at an average of 185,000 barrels per day,” Khzair told Al-Sabah, the official Iraqi daily newspaper.
However, a high-level meeting between the Kurdistan Regional Government (KRG), the Iraqi federal government, and international oil companies on March 2 ended without a breakthrough. A senior source told Peregraf that the main obstacle remains the financial entitlements of oil companies operating in the Kurdistan Region. These companies are demanding the settlement of outstanding debts, estimated at $1 billion, and guarantees for future payments—demands that Baghdad has refused to meet.
Despite pressure from the United States to expedite oil exports, Iraq has not committed to resolving the financial disputes, leaving negotiations at an impasse.
On February 28, Iraqi Oil Minister Hayan Abdul Ghani had stated that an announcement on resuming exports through SOMO (State Organization for Marketing of Oil) was imminent. However, no such announcement has followed. Abdul Ghani previously indicated that initial exports would start at 185,000 barrels per day, gradually increasing to meet the quotas set in Iraq’s federal budget. Currently, the Kurdistan Region produces 300,000 barrels per day, with the remainder allocated for local consumption.
Iraq’s Prime Minister Mohammed Shia’ al-Sudani, speaking via video message to the Erbil Forum on February 26, emphasized his government’s commitment to resolving long-standing disputes over oil revenues. The Iraqi budget law requires the Kurdistan Region to deliver 400,000 barrels per day to SOMO, and Baghdad has agreed to pay the region $16 per barrel until an international company determines production costs.
Oil exports from the Kurdistan Region and Kirkuk through the Ceyhan port have been suspended since March 25, 2023, following a ruling by the Paris Arbitration Court in favor of Iraq’s complaint against Turkey. This disruption has significantly impacted the Kurdistan Region’s economy and its ability to generate revenue.
With ongoing disputes over financial entitlements and no immediate resolution in sight, the fate of the Kurdistan Region’s oil exports remains uncertain.