Turkey and the federal Iraqi government have agreed to resume oil exports from Iraq’s semi-autonomous region of Kurdistan via a pipeline to the Turkish coast, Shakhwan Abdullah, Deputy Speaker of the Iraqi Parliament, said this weekend.
Oil exports from Kurdistan have been halted for two and a half years, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports. Despite some breakthroughs in negotiations in recent months, the disagreements have continued.
The federal government in Baghdad and the regional Kurdish government in Erbil have been squabbling for more than two years over who should be responsible for the oil exports and the subsequent revenue distribution.
Now Iraq and Turkey, through which the Kurdistan oil flows pass, have reached an agreement, according to the Iraqi lawmaker.
Iraq’s state oil marketing firm SOMO has reached an agreement with Turkish companies to restart the crude oil flows, Abdullah said on Sunday.
Separately, the Kurdistan Regional Government (KRG) has finalized an agreement with the federal Iraqi government on revenue sharing and distribution of the oil and non-oil income, the lawmaker said.
All these agreements pave the way to restoring the oil exports from Kurdistan and bringing about 230,000 barrels per day (bpd) to the market initially.
For months, Iraq has been reportedly close to restoring Kurdistan’s oil exports via the Iraq-Turkey pipeline to the Turkish Mediterranean port of Ceyhan.
However, outstanding issues needed to be resolved between Iraq and KRG, Iraq and Turkey, and Iraq and the foreign oil companies operating in Kurdistan, before restarting exports to the Turkish coast.
The Iraqi federal government has issued preliminary approval to a plan for oil exports from Kurdistan to resume, sources with knowledge of ongoing talks told Reuters on Friday.
The foreign oil firms operating in Kurdistan have also given tentative approval to the export resumption plan, the sources added.
By Tsvetana Paraskova for Oilprice.com
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