Baghdad: Iraq’s Ministry of Oil announced on Thursday that it holds the Kurdish Regional Government (KRG) legally responsible for the continued smuggling of crude oil from the Kurdistan region across international borders. In an official statement, the ministry asserted its right to pursue all legal avenues to address the matter.
Control over oil and gas resources has been a longstanding source of friction between the federal government in Baghdad and the Kurdish authorities in Erbil. The situation has grown more pressing as Iraq faces increasing pressure from the Organization of the Petroleum Exporting Countries (OPEC) to reduce its oil production to compensate for previously exceeding agreed quotas. Notably, OPEC includes crude exports from the Kurdish region within Iraq’s overall output cap.
The dispute deepened following a 2022 ruling by Iraq’s federal court, which declared the Kurdish oil and gas law unconstitutional. The court ordered the KRG to transfer control of its oil production to Baghdad. However, the oil ministry noted that the KRG has failed to comply with the directive, resulting in diminished export volumes and reduced national revenue. This non-compliance has compelled Iraq to scale back production from other oil fields to remain within its OPEC obligations.
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“The ministry has repeatedly called on the KRG to deliver crude produced from its oilfields,” the statement read. “Failure to do so could lead to severe financial losses and negatively impact Iraq’s global reputation and its commitments to international oil markets.”
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Talks aimed at restarting Kurdish oil exports through the Iraq-Turkey pipeline—which previously accounted for about 0.5% of global oil supply—remain stalled. Disagreements over payment structures and contractual terms have hindered progress.
