Iraqi Kurdish Government and Baghdad Make Progress on Restarting Oil Exports
Iraq’s Kurdish regional government expressed optimism Wednesday about resuming oil exports “as soon as possible” after Baghdad offered increased cost payments to oil producers, signaling progress in a dispute paused since March 2023.
The International Chamber of Commerce in Paris effectively eliminated the Kurdistan Regional Government’s (KRG) independent pipeline exports through Turkey after granting the federal government of Iraq exclusive rights to market all Iraqi oil.
Based out of regional capital Erbil, the KRG is the official political structure governing Iraq’s predominantly Kurdish northern provinces. Kurds make up roughly 17% of all Iraqis, trailing only behind nearby Turkey and Iran in total population.
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On Tuesday, Baghdad amended its budget to form an independent body within two months to set production costs for the region, while temporarily increasing payments to $16 per barrel—a $10 premium over Iraq’s southern oil fields.
“This move by Baghdad is an opportunity to resolve the problem and resume oil exports to international markets as soon as possible,” the KRG said in an official statement.
The Association of the Petroleum Industry of Kurdistan, representing international oil companies in the region, said the agreement could generate $1 billion monthly for the Kurdish region and its partners. The halted exports have already cost all parties involved approximately $20 billion.
Despite the promising step, energy analysts warned that major negotiations still remain.
