Kurdish PM, US official discuss resumption of Kurdistan’s oil exports
Shafaq News/ On Friday, Kurdish Prime Minister Masrour Barzani discussed the resumption of the Kurdistan Region's oil exports with US Assistant Secretary of State for Energy Resources Geoffrey Pyatt.
According to a statement from the Regional Government’s (KRG) media office, “PM Barzani received a phone call from Assistant Secretary Pyatt, during which they discussed ways to enhance bilateral relations and resume oil exports from the Kurdistan Region.”
“During the call, both sides underscored the need to resolve outstanding issues and overcome obstacles hindering oil exports. They highlighted the negative impacts of the export suspension on the federal budget and Iraq's economic stability.”
The statement noted that both parties agreed on the crucial role the Region can play in strengthening Iraq's sovereignty and independence in the energy sector. “They also stressed the importance of reaching fair solutions to support long-term economic growth and achieve regional stability.”
Kurdistan Oil Export Crisis
KRG suspended its oil exports through the Iraq-Turkiye pipeline on March 25, 2023, due to a legal dispute involving Baghdad, Erbil, and Ankara. This decision came after a Paris-based arbitration court ruled in favor of Baghdad, stipulating that Turkiye had violated a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014.
The halt in oil exports has led to financial losses for the Region, with estimates suggesting over $21 billion lost since the suspension. This financial strain has severely impacted both Erbil and Baghdad, leaving the KRG unable to pay its public sector employees without assistance from Baghdad.
Despite several meetings between the two sides, no resolution has been reached. Disagreements over international oil contracts and the cost of production remain the primary points of contention, with accusations that the Iraqi government has blocked attempts to resume exports. Complicating the situation further, the Kurdistan Region has reduced its oil production by half to comply with OPEC's production limits, exacerbating the financial challenges.
International oil companies operating in the Region have called for the resumption of exports. The Iraqi Oil Ministry has invited the KRG's Ministry of Natural Resources and associated companies for discussions on the future of oil exports. However, the underlying problems appear to be “more political than technical or economic,” leading to a deterioration in relations between Erbil and Baghdad.
