Any resumption of flows will require Baghdad to coordinate with Ankara. [Getty]
The Kurdistan Regional Government (KRG) and Iraq’s federal Ministry of Oil have announced a new oil export agreement for the Kurdish region. However, previous failures to implement similar deals have led to ongoing skepticism.
Finalized on 11 August after nearly a month of joint meetings and inspections of Kurdish oil fields, the deal allocates 50,000 barrels per day (bpd) for domestic consumption in the Kurdistan Region.
The remainder is to be handed over to the State Organisation for Marketing of Oil (SOMO) for export. Any resumption of flows will require the Iraqi government to coordinate with Turkey and implement the agreed-upon export procedures via the Turkish port of Ceyhan, the KRG Ministry of Natural Resources stated on Wednesday.
The 23-member team which negotiated the agreement included 17 representatives from the federal oil ministry. Kurdish officials said current output has reached about 400,000 bpd — nearly back to normal levels — after more than 20 drone attacks, many on energy infrastructure, disrupted operations last month.
However, Turkey and international oil companies operating in the region have not yet begun to implement the agreement. Turkey has blocked oil flows since March 2023 due to a legal dispute over unauthorized exports.
Ali Hama Salih, an opposition member in the Kurdistan region’s parliament, told The New Arab that previous agreements had collapsed and it remained uncertain whether this one would last “two months or longer.”
At a 30 July cabinet session chaired by KRG Prime Minister Masrour Barzani, ministers approved the arrangement and confirmed that companies producing oil for domestic use would be compensated.
Oil designated for export would be transferred to SOMO. Finance Minister Awat Janab Noori said the KRG had submitted its June payroll data and revised trial balance to Baghdad, putting the onus on the federal finance ministry to release salaries.
But disputes over revenue control persist.
Under Iraq’s 2023–2025 federal budget, the KRG must hand over 400,000 bpd and all local revenues to the federal treasury in exchange for its share of the national budget.
The deal also comes amid heightened security concerns.
On 18 July, Baghdad said preliminary investigations found that recent drone strikes used the same model of drone carrying foreign-made warheads, but named no culprit.
Days later, Prime Minister Mohammed Shia al-Sudani discussed the issue with US Secretary of State Marco Rubio, who urged accountability for attacks on US-linked energy facilities and pressed for the resumption of Kurdish exports via Turkey.
Despite the new arrangement, no oil has reached SOMO. Ongoing deadlock in negotiations over salaries and revenue sharing continues to prolong the fiscal crisis, leaving Kurdish civil servants unpaid for months.
