Iraq’s Oil Minister, Hayyan Abdulgani, confirmed on Tuesday that oil exports to Türkiye will resume within the next week, following a prolonged dispute between the central government and the Kurdistan Regional Government (KRG) over oil shipments.
The resumption of exports marks the resolution of a long-standing issue that has hindered the flow of oil between Iraq and Türkiye. Kemal Mohammed, the Deputy Minister of Natural Resources for the KRG, stated that a delegation from the Iraqi Ministry of Oil will meet KRG officials in Erbil on Wednesday, and oil exports could begin as soon as March. Abdulgani also confirmed that exports are indeed scheduled to resume within the week.
The agreement stipulates that the KRG will deliver 300,000 barrels of oil per day to the central government, which will then be exported via the Ceyhan Port by the Iraq State Oil Marketing Organization (SOMO). In addition, changes to the budget law passed by the Iraqi Parliament set the cost of extracting and transporting each barrel from the KRG at $16.
Iraqi Foreign Minister Fuad Hussein also noted that efforts are underway to resolve remaining technical issues with the KRG, and the central government is working to restart the crude oil pipeline. The two-year halt in exports has resulted in an estimated $19 billion in revenue losses for Iraq.
A delegation from the Iraqi Ministry of Oil is expected to visit Erbil in early March to continue discussions. The Kirkuk-Ceyhan pipeline, Iraq’s largest crude export line, is integral to the export process, making the resolution of this dispute critical for Iraq’s oil trade.
The dispute began when Türkiye signed a deal with the KRG to export oil directly to Türkiye, prompting Iraq’s central government to file a lawsuit. The International Court of Arbitration ruled in favor of Iraq, declaring the KRG’s actions illegal. This led to a halt in oil shipments in March 2023, which had previously been transporting 450,000 barrels per day from the KRG to Türkiye.
The two-year suspension has had significant economic implications, with Iraq losing approximately $19 billion in oil revenue.