Kurdistan Oil Export Talks Resume in Baghdad Amid Ongoing Disputes
The primary agenda is to address obstacles hindering the resumption of Kurdistan’s oil exports and to push for a conclusive agreement as soon as possible.
ERBIL (Kurdistan24) – For the second time this week, a tripartite meeting to discuss the resumption of Kurdistan's oil exports is set to take place in Baghdad, underscoring the continued challenges in reaching a final agreement.
A source from Iraq's Ministry of Oil informed Kurdistan24's correspondent that "a second tripartite meeting this week is scheduled for Thursday, in Baghdad. The meeting will include representatives from Iraq's Federal Ministry of Oil, the Kurdistan Region's Ministry of Natural Resources, and representatives of the Association of the Petroleum Industry of Kurdistan (APIKUR).
The primary agenda is to address obstacles hindering the resumption of Kurdistan’s oil exports and to push for a conclusive agreement as soon as possible.
This meeting follows a similar round of talks on Sunday, in Baghdad, which concluded without a final resolution. The matter was subsequently discussed in the Iraqi Federal Cabinet meeting on Tuesday, Mar 4, presided over by Prime Minister Mohammed Shia' al-Sudani. However, no official decision was made regarding Kurdistan’s oil exports.
Challenges and Disagreements
Under the existing agreement between the Iraqi federal government and the Kurdistan Regional Government (KRG), Kurdistan is expected to produce 300,000 barrels of oil per day (bpd), of which 185,000 bpd would be exported via the Ceyhan port in Turkey, while the remaining 115,000 bpd would be used for domestic needs.
However, oil companies operating in Kurdistan have expressed concerns over the federal government's commitment to honoring agreements. They have demanded financial guarantees and advance payments before resuming production and exports. In response, the Iraqi Ministry of Oil has rejected these demands, further complicating negotiations.
Adding to the complexity, Iraq's Ministry of Oil has selected eight international consulting firms to assess the pricing mechanism for Kurdistan’s crude oil extraction costs, proposing a review period of 60 days with an initial compensation rate of $16 per barrel. The oil companies operating in the Kurdistan Region remain skeptical about the Iraqi federal government’s reliability and insist on securing guarantees before resuming operations.
Meanwhile, tensions were evident in last Sunday's meeting between Iraq’s Oil Ministry, Kurdistan’s Ministry of Natural Resources, and APIKUR. In that meeting, APIKUR demanded advance payments and assurances that the federal government would adhere to prior agreements. They also requested a new written agreement to regulate future transactions. However, the Iraqi Ministry of Oil dismissed these demands, leading to another round of negotiations scheduled in Baghdad.
Adnan Jabri, a member of the Iraqi Parliament’s Oil and Gas Committee, reaffirmed that "under the agreements in place, the Iraqi government is obligated to cover extraction costs for Kurdistan’s oil fields. There are no legal barriers preventing exports, and the Ministry of Oil must ensure clarity regarding the terms of Kurdistan's oil contracts."
A Prolonged Oil Dispute
The ongoing negotiations are part of a broader, long-running dispute between the Iraqi federal government and the Kurdistan Regional Government over oil revenues and exports.
In March 2023, a ruling by the International Chamber of Commerce (ICC) led to the suspension of Kurdistan’s independent oil exports via Turkey, compelling Erbil to negotiate a new framework for cooperation with Baghdad.
The halt in oil sales has caused significant financial strain on the Kurdistan Region, impacting public sector salaries and government operations.
As the latest talks unfold, all eyes remain on Baghdad, where stakeholders hope to secure a lasting resolution that balances the interests of both the federal government and the Kurdistan Region while ensuring the stability of Iraq’s oil sector.