ERBIL, Kurdistan Region - Iraqi Prime Minister Mohammed Shia' al-Sudani on Thursday announced that his government has reached a "historic agreement" with the Kurdistan Region to resume Kurdish oil exports, which have been suspended since 2023.
“Today we reached a historic agreement under which the Federal Ministry of Oil will receive crude oil produced from the fields in the Kurdistan Region of Iraq and export it through the Iraq–Türkiye pipeline. This ensures fair distribution of wealth, diversification of export outlets, and encouragement of investment. An achievement 18 years in the making,” Sudani said on X.
The statement comes days after the Kurdistan Regional Government (KRG) and most of the international oil companies operating in the Region announced that they had reached an agreement with Baghdad to resume the Kurdish oil exports though Turkey-Iraq Pipeline.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023, following a ruling by a Paris-based arbitration court in favor of Baghdad. The court found that Ankara had violated a 1973 pipeline agreement by allowing Erbil to independently export oil since 2014.
Confirming the agreement, the Iraqi oil ministry said minutes after Sudani’s statement that the deal comes “as the fruit of intensive efforts and continuous discussions over the past months, launched from a shared national vision aimed at enhancing Iraq's role as a major player in the global energy market, and safeguarding Iraq's sovereignty and firmly defending its national interests and the rights of all Iraqis.”
The ministry added that the agreement includes the establishment of “clear technical and regulatory mechanisms that ensure smooth export and commitment to transparency in oil revenues, contributing to strengthening the state's public finances and increasing federal budget revenues, which will positively reflect on the government's ability to implement service and development projects, and provide foundations for economic stability for Iraq and its people from north to south and from east to west.”
Following the statements from Sudani and the federal oil ministry, KRG's ministry of natural resources said the exports are expected to resume within 48 hours.
Under the tripartite agreement, the KRG will deliver its oil to Iraq's State Oil Marketing Organization (SOMO) - which will handle the sales - in line with Iraq's 2023-2025 Budget Law.
A February amendment to that law set a temporary payment of $16 per barrel for production and transportation costs for the International Oil Companies (IOCs).
Under the terms of the new deal, companies operating in the Kurdistan Region will receive crude oil instead of cash as part of their entitlements, an informed source told Rudaw English earlier this week.
Updated at 7:11 pm
