WASHINGTON DC - The United States is urging the resumption of Kurdish oil exports through the Iraq-Turkey Pipeline, describing its ongoing closure as "unacceptable" due to the economic harm it is causing to both Iraq and the Kurdistan Region, as well as its direct impact on American businesses, a State Department spokesperson told Rudaw on Tuesday.
“It is critical that the Government of Iraq, the Kurdistan Regional Government (KRG), and other involved parties urgently restart the Iraq-Türkiye Pipeline operations,” the spokesperson emphasized, adding that the closure is “directly harming the business of three American companies.
“This is unacceptable. We have repeatedly urged all parties to resolve their issues and will not accept an indefinite delay,” the spokesperson stressed.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023, following a ruling by a Paris arbitration court that found Turkey had violated a 1973 pipeline agreement by allowing Erbil to export oil without Baghdad’s approval.
In February, Iraq’s parliament amended the federal budget law to include a $16-per-barrel fee to cover production and transportation costs for international oil companies (IOCs) operating in the Kurdistan Region. The amendment also requires Baghdad and Erbil to jointly appoint an international consultancy to audit and assess these costs. If no consensus is reached, the Iraqi cabinet will choose the firm.
While the changes were designed to facilitate the resumption of Kurdish oil exports, progress remains stalled.
Kurdistan Region Prime Minister Masrour Barzani stated last week that the suspension of exports has cost over $25 billion in lost revenue.
In a similar vein, the State Department spokesperson told Rudaw on Tuesday that the Iraq-Turkey pipeline “provides a critical alternative route for oil to reach global markets,” benefiting the economies of both Iraq and the Kurdistan Region, “as well as the American companies that operate there."
The reopening of the key pipeline stands to benefit Washington, Baghdad and Erbil, the spokesperson asserted, noting that its continued closure “has done nothing but stifle Iraq’s economic development and undermines American business and help increase Iran’s influence.
“This issue needs to be resolved, and soon!” the spokesperson concluded.
Rudaw learned on Tuesday that a Kurdistan Regional Government (KRG) delegation led by Acting Natural Resources Minister Kamal Mohammed returned to Erbil after three days of talks in Baghdad aimed at resolving long-standing oil disputes.
However, negotiations between Erbil and Baghdad have stalled due to a failure to reach a written agreement, a source familiar with the discussions told Rudaw, speaking on condition of anonymity due to the sensitivity of the matter.
“The federal government has not agreed to put the agreement in writing and wants it to remain verbal,” the source said, adding that “the Kurdistan Regional Government insists on a written deal.”
According to the source, Baghdad’s reluctance is rooted in fears that a formal agreement could be exploited by political rivals of Iraqi Prime Minister Mohammed Shia’ al-Sudani ahead of the country’s legislative elections scheduled for November 11.
Earlier, on Sunday, sources from both Erbil and Baghdad told Rudaw that negotiations had been progressing in a “calmer environment” compared to past rounds of talks. However, one major sticking point remains: the volume of oil the KRG is required to deliver to Iraq’s State Oil Marketing Organization (SOMO).
While Baghdad insists the KRG must export 400,000 barrels per day (bpd), Erbil has proposed an initial volume of 280,000 bpd, the source added.
