Kurdish Oil Export Resumption: Key Developments
The Parliamentary Oil, Gas, and Natural Resources Committee has confirmed the completion of necessary procedures for the resumption of crude oil exports from the Kurdistan Region via the Turkish port of Muwashan. Estimated export volumes are projected to range between 300,000 and 325,000 barrels per day. This development follows recent amendments to the federal budget law, which addressed existing disputes between the governments of Baghdad and Erbil.
Confirmation from the Federal Ministry of Oil
Committee spokesman Ali Shaddad Al-Faris stated that the Federal Ministry of Oil has officially notified the Turkish authorities that preparations are underway to restart the crude oil exports through the Turkish port of Ceyhan. This follows the recent amendments to the budget law that have come into effect. The Turkish side has completed its preparations to initiate the resumption of oil exports.
Estimated Export Quantities and Local Consumption Adjustments
Al-Faris elaborated that the expected export volumes align with agreements made concerning the federal public budget. Notably, during a meeting between the Federal Ministry of Oil and the Kurdistan Regional Government on February 15, 2025, it was emphasized that there is a request from the Kurdistan Regional Government to increase local consumption rates. The approved federal budget for 2023-2024-2025 stipulates an estimated local consumption of 46,000 barrels per day for the Kurdistan Region. However, the regional government is advocating for this figure to be raised to an average of 110,000 barrels per day—a change that would contradict both the federal budget law and the recent amendments ratified by the Iraqi parliament.
Legal Framework and Negotiations
Following the budget law amendments, Al-Faris insisted that the Kurdistan Regional Government must comply with regulations and hand over its production to the State Oil Marketing Organization (SOMO). The continuation of negotiations between the two parties is contingent upon adherence to the newly amended budget law, which was passed by the Iraqi parliament with participation from representatives of the Kurdistan Region.
He stated, "It is imperative to apply the law that has been legislated by the Iraqi parliament without exceptions. The claims made by the Kurdistan Regional Government concerning negotiating delegations must be clearly defined within the legal framework set forth by the recent amendments."
Challenges Ahead for Oil Export Quantities
Al-Faris noted that the Kurdistan Regional Government has expressed challenges in meeting the estimated export levels, which have been formally recognized in the budget law. Failure to comply with these expectations may hinder the overall implementation of the budget regulations.
The spokesman further called upon the Iraqi government, including the Federal Ministry of Oil, to enforce the budget laws and ensure that the recent amendments are upheld in all regions and oil-producing provinces.
Latest Developments
In recent developments, a delegation from the Kurdistan Regional Government arrived in Baghdad to finalize arrangements for the resumption of oil exports through the Turkish Ceyhan line. The Ministry of Energy and Natural Resources from the Kurdistan Region is currently in discussions with officials at the Federal Ministry of Oil to address the outstanding issues related to the resumption of oil exports, as well as other operational matters involving companies in the region.
Additionally, the Federal Ministry of Oil has invited international oil companies contracted with the Kurdistan Regional Government to a meeting in Baghdad set for March 4, 2025, to discuss ongoing operations.
However, it was reported that eight international oil firms operating in the Kurdistan Region have decided not to resume oil exports via the Turkish port of Ceyhan, contrary to agreements outlined by Baghdad regarding the export process. The Deputy Prime Minister for Energy Affairs, Hayyan Abdul Ghani, had previously announced that oil exports from the Kurdistan Region through the Turkish port were set to resume imminently.
This series of events underscores the intricate and often contentious relationship between the Iraqi central government and the Kurdistan Regional Government regarding oil exports. As negotiations continue, the business implications for all parties involved remain significant.
