After years of disagreement with the federal government, the Kurdish regional government has reached a deal that will allow crude oil exports to Turkey to resume starting this Saturday, according to an announcement made by the Iraqi Oil Minister.
Iraq’s oil minister said Thursday that crude exports from the autonomous Kurdistan region to Turkey would resume on Saturday, hours after a deal was finalized following years of dispute.
The Kurdish regional government had for years earned billions of dollars in revenues, exporting oil to Turkey without the Iraqi federal government’s approval.
Following years of wrangling, a preliminary agreement was reached in early April, granting the Iraqi federal government control over exports with a view to immediately resuming sales.
Hours later, Iraqi Oil Minister Hayan Abdel Ghani said crude exports would resume from Saturday.
Nearly a decade after launching an international arbitration, the Iraqi federal government in March won the right to control the autonomous Kurdistan region’s oil exports through Turkey.
The international ruling in March led to the suspension of exports, forcing the Kurdish government in Arbil to negotiate before reaching in early April the preliminary deal with Baghdad.
Oil has long been a lifeblood for the Kurdish region, with 475,000 barrels exported daily via the Turkish port of Ceyhan.
The disruption of oil exports had caused a shortfall of around a billion dollars in revenue to authorities in Arbil, capital of the autonomous Kurdish region, according to analyst Kovand Shirwani.
Under the agreement, sales of Kurdistan’s crude will be managed by SOMO, with revenues paid into an account jointly owned by Baghdad and Arbil.
The agreement is expected to boost federal government coffers, which in March raised $7.5 billion from oil exports.
In February 2022, an Iraqi court authorized the federal government to cancel contracts negotiated by Kurdistan with foreign companies.
Another court had also invalidated agreements between Arbil and several companies.
The new agreement provides a path to developing a general law overseeing the country’s hydrocarbons, which has been on hold since 2005.
Miroslava Salazar with AFP.
