Shafaq News

After more than two years of suspension, oil exports from Iraq’s Kurdistan Region through the Ceyhan pipeline have stabilized at around 190,000 barrels per day (bpd) — a cautiously optimistic milestone that signals both technical recovery and political fragility.

Officials expect output to gradually rise to 225,000 bpd once maintenance and logistical adjustments are completed, marking a potential turning point for one of Iraq’s most disputed economic files.

A source at the North Oil Company in Kirkuk told Shafaq News that the current volume reflects a “stabilization of operations and improved pumping capacity,” noting that any increase will depend on completing all technical and logistical maintenance to ensure uninterrupted flow.

Exports had been halted since early 2023 amid legal disputes between Baghdad and Erbil over oil rights, revenue distribution, and control of pipelines. The stoppage, which followed earlier shutdowns, left facilities underused and companies uncertain about the future.

The resumption therefore represents not only a logistical achievement but also a sign of renewed coordination between the Kurdistan Regional Government (KRG), federal authorities, and the Turkish pipeline operator — a coordination long absent from Iraq’s energy scene.

Energy expert Ali Khalil told Shafaq News that maintaining exports at 190,000 bpd is “an important step toward reviving the region’s oil sector,” but stressed that “the real challenge lies in sustaining production and scaling beyond 225,000 bpd.”

He said consistent output “will strengthen revenues and improve the fiscal balance for both the region and the Iraqi state.”

For Kurdistan, the resumption offers a much-needed cash flow to pay public salaries, fund local projects, and restore investor confidence. For Baghdad, it increases overall export volumes and eases budgetary strain amid volatile global oil prices.

Despite this progress, infrastructure remains vulnerable. The pipeline system requires constant maintenance, and any disruption could once again halt exports. At the same time, the financial and legal framework between Baghdad and Erbil remains unsettled. Without a comprehensive revenue-sharing agreement, disputes over oil ownership, profit allocation, and contract transparency could re-emerge.

Khalil emphasized that “the challenge is not only in pumping oil, but in ensuring international-grade logistics, compliance with Iraqi and global regulations, and timely payments to operating companies.”

Experts also highlight the need for transparent contracts, routine supervision, and clear payment systems to prevent friction and sustain investor trust. The KRG’s credibility in international markets depends largely on honoring commitments and maintaining consistent operations.

According to Khalil, the gradual recovery is a positive signal to foreign investors who had grown wary of the region’s political uncertainty. “Stable exports demonstrate that Kurdistan can meet technical and contractual obligations despite complex internal dynamics.”

If sustained, the rise to 225,000 bpd could enhance the Kurdistan Region’s financial autonomy within Iraq’s federal framework and strengthen its hand in negotiations with Baghdad. It would also inject liquidity into the local economy through salaries, contracts, and development spending.

Yet the memory of previous interruptions — from legal injunctions to pipeline breakdowns — keeps investors cautious. Long-term confidence will depend on institutional stability, not short-term deals.

The renewed exports signal a tactical détente between Baghdad and Erbil rather than full reconciliation. Both sides are motivated by fiscal necessity, but core disputes — especially over constitutional interpretations of oil ownership and the management of proceeds — remain unresolved.

The coming months will test whether both governments can maintain operational flow, uphold transparency, and avoid politicizing the oil file. Success could lay the groundwork for broader cooperation on energy governance; failure could revive the mistrust that has long plagued Iraq’s federal system.

The return of Kurdistan’s oil to global markets marks a cautious re-entry, not a final victory. The next stage — scaling output, improving quality, and maintaining transparency — will determine whether this recovery endures.

“This step is meaningful only if supported by sustained technical, financial, and legal stability. The coming months will reveal whether the region and the state can turn this momentum into lasting economic resilience,” Khalil concluded.

Written and edited by Shafaq News staff.