Kurdistan Region Oil Exports Set to Resume: Key Insights and Economic Impact
On February 5, 2025, oil expert Kovand Sherwani detailed the forthcoming resumption of oil exports from the Kurdistan region to global markets, following a prolonged hiatus caused by disputes between the federal government and the regional administration.
Sherwani explained that the export process will involve the transport of crude oil from the Kurdistan fields through pipelines to the Turkish port of Ceyhan, where the Iraqi National Oil Company (SOMO) will oversee the marketing and sale of the oil. He noted that SOMO has dedicated facilities at the Ceyhan port, which will streamline the export operations.
Importantly, Sherwani clarified that the oversight of the Kurdistan Oil Department will cease upon reaching the border with Turkey. At this juncture, metering systems will monitor the exported quantities, both at the border and during storage at Ceyhan, in accordance with the stipulations outlined in Article 12 of the amended agreements governing the Turkish oil pipeline.
He emphasized that all requisite arrangements have been finalized among stakeholders, including entities from the Iraqi government, the Kurdistan region, and the operating oil companies. Currently, only minor discussions with the Turkish authorities remain before the full resumption of exports can be executed.
The resumption of oil exports from Kurdistan is anticipated to significantly bolster the Iraqi economy and provide additional financial resources to the region, which is heavily reliant on oil revenues. This development is part of ongoing efforts to reconcile the differences that led to the suspension of oil exports months earlier, which adversely impacted both the Iraqi and regional economies.
The halt in exports took place in late 2023, initiated by disputes over oil marketing mechanisms and revenue sharing between the federal government and the regional government. This interruption incurred substantial economic losses for both parties, prompting a series of negotiations aimed at finding a mutually agreeable resolution.
Analysts project that reinstating the Kurdistan oil exports will enhance relations between Baghdad and Erbil, fostering collaboration in the oil sector—an outcome that could yield positive ramifications for the broader Iraqi economy.
Final agreements regarding the export resumption hinge upon successful negotiations with the Turkish side, with expectations of reaching a comprehensive accord that effectively resolves the Kurdistan oil export crisis, reinstating operational normalcy.