Iraqi FM: Resuming Kurdistan oil exports "crucial" for Iraq
Shafaq News/ On Saturday, Foreign Minister Fuad Hussein announced that Iraq is working to resolve technical issues with the Kurdistan Regional Government (KRG) to restart crude oil exports to Turkiye, citing $19 billion in lost revenue due to the nearly two-year suspension.
“The legal framework has been agreed upon, and discussions now focus on technical matters between oil companies and both federal and regional governments to resume exports,” Hussein told Bloomberg on the sidelines of the Munich Security Conference, expressing optimism that negotiations could “begin next week and be finalized within days.”
Arbitration Dispute Halts Oil Flow
Oil exports from Kurdistan to Turkiye’s Ceyhan port were suspended in March 2023 following an arbitration ruling, which Hussein dismissed as a “minor issue”, suggesting it could be resolved during next year’s Baghdad-Ankara pipeline contract negotiations.
Budget Amended to Incentivize Exports
The Iraqi Parliament recently amended the national budget, increasing compensation for oil production and transportation from $6 to $16 per barrel. Hussein said this adjustment has improved the chances of resuming exports “as soon as possible”, with oil companies agreeing to the temporary rate.
“Once the pipeline is ready and oil companies are prepared, exports can resume,” Hussein stated. “Until the actual costs are assessed, the rate will remain at $16 per barrel, subject to revision following a third-party audit.”
Pipeline Crucial for Market Stability
Hussein emphasized that Iraq's oil production remains limited under OPEC and OPEC+ agreements, but reopening the pipeline is a strategic necessity.
“We have no alternative pipeline. This one is crucial for us,” he said, noting that resuming exports would bolster economic security amid geopolitical uncertainties.
The suspension of the Iraq-Turkiye pipeline has cut Iraqi crude exports by 500,000 bpd, tightening global supply. Restoring Kurdistan’s oil flows could help offset production cuts and stabilize markets.
Oil Minister Hayyan Abdul Ghani had stated earlier that Iraq plans to transfer at least 300,000 bpd once operations resume and has begun pressuring the KRG to route oil through the state-owned SOMO (State Organization for Marketing of Oil).
Turkiye and US Pressure for Resumption
Turkiye has repeatedly stated that the pipeline is operational, placing the responsibility on Iraq to resume flows, while the United States voiced strong support for restoring oil exports through the Iraq-Turkiye pipeline.
However, Baghdad faces a delicate balance—while resuming Kurdistan’s oil exports could ease market pressure, Iraq remains bound by OPEC+ production limits.
