MUNICH, Germany - Iraq and the Kurdistan Region’s oil ministries announced Sunday that they reached an agreement to resume the Region’s oil exports.
“Following communication and coordination between Iraq’s Oil Ministry and the Kurdistan Region’s Natural Resources Ministry, an agreement was reached to resume the Region’s oil exports, based on available quantities,” read a statement by the Kurdistan Region negotiating team.
“Today, a joint technical team was formed to inspect the export pipeline and indicate its readiness,” the statement read, adding Erbil and Baghdad are committed to “implementing the provisions of the Federal General Budget Law.”
The amendments to the federal budget law involved Article 12 of the Iraqi federal budget, which states that Baghdad will reimburse Erbil for the production and transportation cost of one barrel of oil at the average cost of production and transportation of the federal oil ministry – which was previously valued at $6.
The international oil companies (IOCs) had repeatedly stated that the value set out in the budget was way lower than their expenses. The modifications to the law set the cost of production and transportation of a barrel of oil at $16.
The law was published in the Iraqi Official Gazette on February 18, after being ratified by Iraqi President Abdul Latif Rashid, officially launching the amendment into effect.
Today’s agreement came after the Association of the Petroleum Industry of Kurdistan, known as APIKUR, showed its readiness on Saturday night to resume the Kurdistan Region’s oil exports.
“APIKUR member companies stand ready to resume oil exports through the Iraq-Turkiye pipeline after agreements are reached that uphold our member companies existing contractual, commercial, and economic terms.”
“We agree with Iraqi Prime Minister Al Sudani’s statement on Feb. 22, that expediting oil exports through the ITP will… strengthen Iraq’s economy, and meet the needs of its citizens,” APIKUR added.
The Kurdistan Region’s oil exports have been halted since March 2023, dealing a major blow to Iraq and the Region's economy, with over $25 billion in lost revenue to date.
A report from Reuters on Friday, citing multiple sources “with direct knowledge of the matter,” claimed that US President Donald Trump’s administration has pressured Iraq to allow for the resumption of Kurdish oil exports, in a measure to offset the impact of cutting off Iranian exports which Trump has pledged to cut to zero under his “maximum pressure” campaign against Tehran.
Today’s agreement between Erbil and Baghdad came a day after Iraqi PM Sudani and Kurdistan Region President Nechirvan Barzani stressed the need to expedite the process of resuming Kurdish oil exports.
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