Shafaq News/ On Saturday, ForeignMinister Fuad Hussein announced that Iraq is working to resolve technicalissues with the Kurdistan Regional Government (KRG) to restart crude oilexports to Turkiye, citing $19 billion in lost revenue due to the nearly two-yearsuspension.
“The legal framework has been agreedupon, and discussions now focus on technical matters between oil companies andboth federal and regional governments to resume exports,” Hussein told Bloombergon the sidelines of the Munich Security Conference, expressing optimism that negotiationscould “begin next week and be finalized within days.”
Arbitration Dispute Halts Oil Flow
Oil exports from Kurdistan toTurkiye’s Ceyhan port were suspended in March 2023 following an arbitration ruling, which Hussein dismissed as a “minorissue”, suggesting it could be resolved during next year’s Baghdad-Ankarapipeline contract negotiations.
Budget Amended to IncentivizeExports
The Iraqi Parliament recentlyamended the national budget, increasing compensation for oil production andtransportation from $6 to $16 per barrel. Hussein said this adjustment has improvedthe chances of resuming exports “as soon as possible”, with oil companiesagreeing to the temporary rate.
“Once the pipeline is ready and oilcompanies are prepared, exports can resume,” Hussein stated. “Until the actualcosts are assessed, the rate will remain at $16 per barrel, subject to revisionfollowing a third-party audit.”
Pipeline Crucial for MarketStability
Hussein emphasized that Iraq's oilproduction remains limited under OPEC and OPEC+ agreements, but reopening thepipeline is a strategic necessity.
“We have no alternative pipeline.This one is crucial for us,” he said, noting that resuming exports would bolstereconomic security amid geopolitical uncertainties.
The suspension of the Iraq-Turkiyepipeline has cut Iraqi crude exports by 500,000 bpd, tightening global supply.Restoring Kurdistan’s oil flows could help offset production cuts and stabilizemarkets.
Oil Minister Hayyan Abdul Ghani had statedearlier that Iraq plans to transfer at least 300,000 bpd once operations resumeand has begun pressuring the KRG to route oil through the state-owned SOMO(State Organization for Marketing of Oil).
Turkiye and US Pressure forResumption
Turkiye has repeatedly stated thatthe pipeline is operational, placing the responsibility on Iraq to resume flows,while the United States voiced strong support for restoring oil exports throughthe Iraq-Turkiye pipeline.
However, Baghdad faces a delicatebalance—while resuming Kurdistan’s oil exports could ease market pressure, Iraqremains bound by OPEC+ production limits.