Iraq restarts oil exports from Kurdistan region to Türkiye

Iraq has resumed oil exports from its semi-autonomous Kurdistan region to Türkiye after more than two-and-a-half years.

The restart follows an interim agreement between Iraq's Federal Government, the Kurdistan Regional Government (KRG) and foreign oil producers operating in the region.

According to Iraq's Oil Ministry, operations commenced at 6am local time without significant technical issues.

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The agreement permits the transport of 180,000–190,000 barrels per day (bpd) of crude toTürkiye's Ceyhan port, with plans to increase this volume to 230,000bpd.

The pipeline had been shut since March 2023 after the International Chamber of Commerce (ICC) ordered Türkiye to pay Iraq $1.5bn (Tl62.35bn) in damages for unauthorised exports from Iraqi Kurdistan between 2014 and 2018.

This followed Iraq's arbitration claim in 2014, asserting that the State Oil Marketing Organisation (SOMO) held exclusive rights to export the country's oil.

Iraq, the second-largest oil producer among the Organisation of Petroleum Exporting Countries (OPEC), exports around 3.4 million barrels per day (mbbl/d) from its ports in the southern region.

The addition of northern exports is expected to ease economic pressures in the Kurdistan region, which has faced salary delays and service cuts.

Iraq's delegate to OPEC, Mohammed al-Najjar, told state news agency INA: “Iraq can export more than it is now after the resumption of flows via the Kirkuk-Ceyhan pipeline, in addition to other planned projects at Basra port.

“OPEC member states have the right to demand an increase in their production shares, especially if they have projects that led to an increase in production capacity.”

Previously, several efforts to restart Iraqi oil exports to Türkiye failed, with discussions breaking down over pricing issues.

The US government advocated for a restart, as increased supply could help reduce crude prices – a priority for the Trump administration, which also committed to reducing Iran's crude exports to zero.

Eight oil companies in Iraqi Kurdistan, responsible for more than 90% of the region's production, have reached agreements to resume exports.

Under the deal, the KRG will supply crude to SOMO, with an independent trader managing sales from Ceyhan. The producers will receive $16 per barrel sold.

The preliminary plan requires the KRG to commit to delivering at least 230,000bpd to SOMO, with an additional 50,000bpd reserved for local use.

The parties involved plan to meet within 30 days to discuss settling outstanding debts owed by the KRG to producers.

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Iraq Oil Ministry Under-secretary Bassem Mohamed said that the resumption of Kurdish oil flows will help increase the country's exports to nearly 3.6mbbl/d in the coming days.

"Iraq restarts oil exports from Kurdistan region to Türkiye" was originally created and published by Offshore Technology, a GlobalData owned brand.

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