Baghdad: Oil exports from Iraq’s semi-autonomous Kurdistan region are set to resume next week, Iraq’s Oil Minister Hayan Abdel-Ghani announced on Monday. The breakthrough ends a nearly two-year impasse, signaling improving ties between Baghdad and Erbil. The resumption could add more supply to the global oil market, potentially influencing prices.
The disruption began in March 2023 when Turkey halted the oil flows following a ruling by the International Chamber of Commerce. The tribunal ordered Ankara to pay Baghdad $1.5 billion in damages for unauthorized pipeline exports conducted by the Kurdistan Regional Government (KRG) between 2014 and 2018.
“Tomorrow, a delegation from the Ministry of Oil … will visit the Kurdish region to negotiate the mechanism for receiving oil from the region and exporting it. The export process will resume within a week,” Abdel-Ghani told reporters.
He further stated that Baghdad would receive 300,000 barrels per day (bpd) from the Kurdistan region.
The resumption of Kurdish oil exports coincides with broader developments in the global oil market. A potential Russia-Ukraine peace deal could lead to additional supply, while OPEC+ is scheduled to begin easing its production cuts from April.
Oil prices reflected these dynamics on Monday, with Brent crude trading below $75 per barrel as of 1235 GMT.
Iraq’s OPEC Compliance and Export Strategy
As the second-largest oil producer in OPEC after Saudi Arabia, Iraq is currently producing around 4 million bpd, in accordance with its OPEC+ commitments. However, it remains uncertain how the country will manage the increased exports from the north while maintaining compliance with the agreed production limits. A possible adjustment could involve reducing exports from Basrah in southern Iraq.
Meanwhile, Erbil-based Rudaw TV reported that Kurdistan’s Natural Resources Minister Kamal Mohammed indicated oil exports could restart before March, as all necessary legal procedures have been completed.
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To facilitate the export resumption, the Iraqi parliament recently approved a budget amendment subsidizing production costs for international oil companies operating in Kurdistan. This measure aims to resolve financial disputes and reinvigorate the region’s oil industry.
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The move is expected to provide economic relief in Kurdistan, where the prolonged halt in oil exports has led to delays in public sector salaries and cuts to essential services.
