Iraq and Kurdish Region Strike Deal to Restart Key Oil Exports
The Iraqi federal government and the autonomous Kurdistan Regional Government have reached a significant agreement to resume oil exports through Turkey. This move ends a year-long halt that has cost both sides billions in lost revenue and strained regional relations.
Restarting the Flow to Ceyhan
Under the new deal, oil flow from northern Iraq to Turkey’s Ceyhan port on the Mediterranean is expected to begin this Wednesday. The Ceyhan hub is a critical outlet for Iraqi oil, with a capacity to handle hundreds of thousands of barrels per day. Its closure since March 2023 has forced producers in the Kurdish region to rely on more expensive and less efficient local sales or storage.
The agreement marks a breakthrough after months of difficult negotiations. The central dispute centered on who had the authority to market the oil and where the revenue would go. The new deal appears to resolve these core issues, paving the way for a return to normal operations.
A New Oversight Committee and Revenue Plan
A key part of the agreement is the formation of a joint committee to oversee the export process. This committee will include representatives from both Baghdad and the Kurdish regional capital, Erbil. Its role will be to ensure transparency and smooth coordination as exports ramp up.
Critically, the deal states that revenue from the sales will be returned to the federal treasury in Baghdad. From there, funds are expected to be allocated back to the Kurdistan Regional Government in accordance with Iraq’s national budget. This structure aims to satisfy Baghdad’s demand for control over national resources while ensuring the Kurdish region receives its constitutional share of revenue.
Focus on Security and Stability
The agreement also includes plans to implement enhanced security measures. These measures are designed to protect oilfields and pipeline infrastructure to ensure continuous and safe operations. Pipeline security has been a persistent concern, with past incidents of sabotage and technical faults causing disruptions.
For international markets, the resumption of exports from Ceyhan could add significant supply. Before the stoppage, the pipeline carried roughly 450,000 barrels per day. While a full return to that level may take time, even a partial restart will increase global oil availability. This comes as OPEC+ members, including Iraq, are attempting to manage prices through production cuts.
For investors, the deal reduces a major political risk overhanging oil projects in the Kurdish region. It provides a clearer path for international energy companies operating there to get paid and plan for the future. The success of this agreement will now depend on its implementation, with all parties watching closely as the first oil begins to flow this week.
