Iraq has resumed crude oil exports from the autonomous Kurdistan region, ending a hiatus of over two years. The exports were halted due to legal and technical disputes between Baghdad and the Kurdistan regional government. The Iraqi oil ministry announced the resumption of oil exports through the Iraq-Turkey pipeline, which is expected to strengthen the country’s energy sector.
The dispute over oil exports has been a major point of contention between Baghdad and the Kurdistan regional government. The Kurdistan region has significant oil reserves, and control over these exports has been a key issue. In 2023, an arbitration tribunal ruled that oil exports by the regional government were illegal, and that Baghdad had the exclusive right to market all Iraqi oil.
The resumption of oil exports is the result of an agreement between Baghdad and the Kurdistan regional government, facilitated by the United States. The deal allows for the export of 190,000 barrels per day, with an additional 50,000 barrels per day for domestic consumption. The Iraqi State Oil Marketing Organisation (SOMO) will receive the oil for export.
The agreement also includes a provision for international oil companies operating in the Kurdistan region to resume exports via the Iraq-Turkey pipeline. The companies have agreed to meet with the Kurdish authorities within 30 days to settle outstanding debts. The Kurdistan region owes oil companies over $1 billion in production expenses.
The resumption of oil exports is significant for Iraq, as crude oil sales make up 90% of the country’s revenues. Iraq is a founding member of the OPEC cartel and currently exports 3.4 million barrels per day. The deal is expected to strengthen the economic partnership between the United States and Iraq, according to US Secretary of State Marco Rubio.
The losses to Iraq since the pipeline closed have been estimated at over $35 billion. The Norwegian group DNO ASA has chosen not to join the deal, citing concerns over payment surety. The resumption of oil exports is a positive development for Iraq’s energy sector, and the country is expected to benefit from the increased revenue. The deal also highlights the importance of international cooperation in resolving disputes and promoting economic development.
