Peregraf– Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani announced on Saturday that Baghdad and international oil companies have reached an agreement to resume oil exports from the Kurdistan Region through Turkey, a breakthrough that could help resolve the region’s salary crisis and restore vital revenues to both Erbil and Baghdad.
"An understanding and agreement has been reached between the Iraqi government and foreign oil companies operating in the Kurdistan Region to resume oil exports. This will be a good start to eliminate obstacles," Barzani said. He added that Baghdad must now implement its commitments: "I hope the agreement will be satisfied by everyone. The Iraqi government will implement the rights and financial entitlements of the Kurdish people, and salaries will no longer be the headlines."
Barzani made the remarks during the inauguration of the Shekhan–Lalish dual carriageway in Duhok province.
More than 1.2 million employees in the Kurdistan Region are still waiting for their July salaries, with half of September already passed. The resumption of oil flows has become directly linked to the release of these payments.
The announcement comes a day after Reuters reported that Iraq’s cabinet had given preliminary approval to a draft plan negotiated between Baghdad, the KRG, and international oil companies. The plan would revive exports via the Kirkuk-Ceyhan pipeline, which has been idle since March 2023, when an arbitration court ordered Turkey to pay Iraq $1.5 billion in damages over unauthorized Kurdish exports.
Under the draft, the KRG would deliver at least 230,000 barrels per day (bpd) to Iraq’s state marketer SOMO, while keeping 50,000 bpd for local consumption. Sales from Turkey’s Ceyhan port would be handled by an independent trader at SOMO’s official prices. For every barrel sold, $16 would go into an escrow account for producers, with the rest transferred to SOMO.
While the draft does not yet resolve nearly $1 billion in unpaid arrears to oil companies, negotiators say discussions are at their most advanced stage. "We’re closer to a tripartite agreement than we’ve ever been, as all are showing flexibility," one company executive told Reuters.
The KRG confirmed on September 17 that it had formally requested SOMO to take delivery of its crude, stressing that Erbil had "fulfilled all its obligations." Spokesperson Peshawa Hawramani said Baghdad now had "no justification" to delay July and August salary transfers.
SOMO Director General Ali Nazar Al-Shatri said the federal government is ready to receive Kurdish oil, describing the move as key to unifying Iraq’s exports and strengthening its position as a reliable supplier to Europe.
Exports from Kurdistan and Kirkuk have been suspended for 18 months, costing both governments tens of billions of dollars. Peregraf estimates Kurdistan alone has lost more than $28 billion in revenues since March 2023, with combined losses for Baghdad and Erbil exceeding $50 billion.
Observers say a final agreement in the coming days could allow northern oil exports to resume before the end of this week—potentially easing Iraq’s financial pressures and bringing long-awaited relief to public employees in the Kurdistan Region.