Iraq's Parliament to address budget law amendment resolving Kurdistan oil export issues

Shafaq News/ On Sunday, the Iraqi Parliamentary Finance Committee revealed details of an amendment to the federal budget law, which is scheduled for its first reading during Tuesday’s session.

The amendment focuses on production costs for oil in the Kurdistan Region. Jamal Kocher, a committee member, explained to Shafaq News Agency, "The amendment involves only one clause—adjusting production costs for oil in the Kurdistan Region. Previously, the amount was very low, but after discussions between Baghdad and Erbil, an interim estimate of $16 per barrel was proposed until the advisory committee determines final costs with input from the Kurdistan Regional Government (KRG) and production companies."

Kocher emphasized that the amendment is a step toward resolving disputes and resuming Kurdistan's oil exports to Turkiye's Ceyhan port, adding, "This amendment stems from a political agreement to address this issue, ensuring it passes Parliament smoothly."

Parliamentary Finance Committee member Moeen al-Kadhimi provided further details, stating that "Articles 12 and 13 of the budget law would be amended. Article 12 pertains to production and transportation costs, which vary between Basra ($6 per barrel) and the Kurdistan Region ($20 per barrel). Article 13 addresses the mechanisms for exporting oil from the Region via the Ceyhan pipeline."

Al-Kadhimi stressed the urgency of passing the amendment before December 9, the end of the current legislative term.

Iraq’s federal budget for 2023-2025, approved under Law No. 13 of 2023, includes significant provisions to reconcile disputes between Baghdad and the KRG over oil revenues. These disputes have long hindered collaboration, with the KRG managing its oil sector independently and exporting crude via Turkiye.

However, oil exports from the Kurdistan Region have been suspended since March 2023, following an international arbitration ruling against Turkiye for allowing oil exports without Baghdad’s approval. The prolonged suspension has strained both Regional and federal economies.