Resumption of Oil Exports from the Kurdistan Region Aimed within Days
Key Developments in Iraqi Oil Sector
The Iraqi Deputy Prime Minister and Oil Minister, Hayan Abdul Ghani, has confirmed the readiness of the Kurdistan Regional Government’s oil export pipeline to the Turkish port. Discussions with Turkish officials are currently underway to facilitate the resumption of oil exports within the next two days.
Minister Abdul Ghani stated on Monday, “The ministry is in negotiations with the Turkish side to resume oil exports. Once we receive their approval, we will be able to restart the exports.” He expressed optimism that exports would recommence imminently.
According to Abdul Ghani, “The oil export pipeline to the Ceyhan oil port is operational, apart from some minor technical adjustments necessary for resuming exports.” He stated that the agreed export volume from the Kurdistan Region is expected to be between 300,000 and 325,000 barrels per day, a portion of which will cater to domestic consumption, while the remainder is earmarked for export activities.
The Deputy Minister of Oil highlighted that post-resumption, the initial phase would involve a supply of approximately 185,000 barrels of oil per day, with the target to incrementally increase to 400,000 barrels per day.
He further elaborated, “The prior suspension of oil exports from the Kurdistan Region has resulted in adverse impacts on oil fields, necessitating a period of renewal to restore production capacity before reaching the targeted export volume of 400,000 barrels per day. Currently, the available export volume stands at 300,000 barrels per day, with 185,000 barrels allocated explicitly for exports.”
The Ministry of Natural Resources of the Kurdistan Region of Iraq (KRG) reiterated on Sunday that both governments have reached an agreement to proceed with the resumption of oil exports.
An announcement made by the Iraqi Oil Ministry indicated that the plans for resuming oil exports from the Kurdistan Region via Ceyhan port are nearing completion. It was noted that before the exports could resume, it is essential to establish a definitive agreement that outlines the quantities to be utilized for domestic purposes.
In preparation for the resumption, a technical team has been formed, focusing on assessing and optimizing the Kurdish oil export capabilities to align with expectations from both parties involved.
Since early 2023, the targeted daily oil exports from the Kurdistan Region have reached 400,000 barrels, with an additional 75,000 barrels being allocated through Kirkuk via the pipeline. However, operations were halted following an international court ruling in Paris favoring the Iraqi Federal Government, which also revived Turkey’s 1973 agreement concerning the transference of Kurdish oil exports without approval from Baghdad.
In light of the recent developments, both the Ministry of Natural Resources and the KRG have indicated that the exports will adhere to the available quantities established by the government.
Both the Ministry of Natural Resources and the Kurdish administration are committed to implementing provisions in the federal budget laws as ratified by the Iraqi parliament on February 2, 2025. The approved budget outlines specific regulations pertaining to oil revenues as detailed in Article 12 of the budget law.
By February 18, 2025, the comprehensive budget law of Iraq will be published, specifying the operations surrounding the resumption of oil exports.
The revenue model established under this framework delineates that the cost of production, transit, and export of oil from the Kurdistan Region is projected at $16 per barrel as classified by the production and export guidelines. Meanwhile, an international price adjustment mechanism will be monitored through a specified 60-day review period to gauge market dynamics.
