Peregraf
Iraqi Foreign Minister Fuad Hussein on Sunday received Steven Fagin, the US embassy’s chargé d’affaires in Baghdad, for talks focused on resuming the long-stalled Kurdistan Region’s oil exports, the Iraqi Foreign Ministry announced.
The two discussed bilateral relations between Iraq and the United States, particularly the role of American oil companies in the country, as well as disputes involving oil companies operating in the Kurdistan Region. The ministry said the meeting explored “ways to address outstanding issues” to enable the restart of crude exports. Hussein and Fagin also reviewed regional developments, with the US envoy presenting Washington’s position on the evolving Middle East situation.
The talks come as momentum builds toward restarting Kurdish oil exports via Turkey’s Ceyhan Port, halted since March 2023 after an arbitration ruling ordered Ankara to stop independent Kurdish sales. The suspension has cost Iraq and the Kurdistan Region an estimated $50 billion, according to Kurdish officials.
Turkey Signals Readiness
Turkish Energy Minister Alparslan Bayraktar said last week that the Iraq–Turkey pipeline has been fully operational since October 2023 and is ready to resume pumping immediately. Speaking to Sky News, Bayraktar stressed that Ankara awaits Baghdad’s approval of a new framework agreement. “We have been ready since October 4, 2023,” he said, adding that Turkey has received “encouraging signals” from Iraqi officials.
Turkey is pressing for a new deal governing crude flows, with Bayraktar revealing that Ankara has submitted a draft agreement during talks with Iraqi Oil Minister Hayyan Abdul-Ghani in Vienna. The Turkish minister emphasized that the current pipeline framework no longer meets Ankara’s expectations or global energy standards, while highlighting the line’s 1.4–1.5 million barrels per day capacity.
Breakthrough Between Erbil and Baghdad
On August 13, the Kurdistan Regional Government (KRG) confirmed it had signed a new agreement with Iraq’s Ministry of Oil to restart exports. Under the deal, reached two days earlier, the Kurdistan Region will retain 50,000 barrels per day (bpd) for local consumption, while the rest will be handed over to Iraq’s State Oil Marketing Organization (SOMO) for export through Turkey.
The breakthrough marks a significant step toward resolving the Erbil-Baghdad energy dispute. The shutdown in 2023 not only disrupted Kurdish revenues but also deepened the Kurdistan Region’s financial crisis, leaving public employees unpaid for months.
Production Recovers After Drone Attacks
The agreement comes as Kurdish oil production recovers from July’s drone attacks that temporarily knocked out major fields, slashing output by more than 70 percent. According to Yadgar Sadiq, head of the Runbin Organization for Transparency in Oil Processes, production has since rebounded to about 220,000 bpd, with seven of nine fields back online.
Gulf Keystone Petroleum confirmed it has resumed pumping at the Shaikan field, which produces around 45,000 bpd, though key fields at Tawke and Peshkabour, with a combined capacity of 70,000 bpd, remain shut due to damage.
Despite recent progress, hurdles remain before exports can fully resume. Baghdad and Ankara must still finalize a comprehensive framework agreement, while international oil companies operating in the Kurdistan Region are demanding guarantees on cost recovery and arrears.
Meanwhile, the Kurdistan Region continues to struggle with an acute financial crisis, with public sector salaries delayed and revenues tied to the delivery of oil.