Baghdad Delegation in Erbil to Finalize Deal on Resuming Kurdistan’s Oil Exports

ERBIL (Kurdistan24) – In a pivotal and long-awaited development that could end a costly 18-month stalemate, a delegation from Iraq's federal North Oil Company arrived in Erbil on Monday morning with full authority to finalize the procedures for resuming oil exports from the Kurdistan Region. The high-level meeting with the Kurdistan Regional Government's (KRG) Ministry of Natural Resources is the culmination of extensive negotiations and is expected to culminate in the signing of a tripartite agreement that will restart the flow of hundreds of thousands of barrels of oil per day to international markets, potentially resolving one of the most contentious and financially damaging disputes between Erbil and Baghdad.

According to information obtained by a Kurdistan24 correspondent on the ground, Dilan Barzan, the delegation, representing the Iraqi Ministry of Oil, has been granted "full authority to complete the procedures for resuming Kurdistan's oil exports."

The delegation's first meeting with their KRG counterparts began on Monday morning, with the aim of hammering out the final technical and logistical steps required to restart the pipeline to the Turkish port of Ceyhan.

This crucial meeting comes just a day after KRG spokesperson Peshawa Hawramani announced that a comprehensive agreement between the Iraqi Ministry of Oil, the KRG's Ministry of Natural Resources, and the international oil companies operating in the region was imminent.

"The signing of the agreement is imminent, and if nothing unforeseen occurs, it will definitely be signed tomorrow," Hawramani told Kurdistan24 on Sunday, signaling that a consensus had been reached after months of intensive negotiations.

Under the terms of the pending agreement, the Kurdistan Region will hand over 230,000 barrels of oil per day to Iraq's State Organization for Marketing of Oil (SOMO) for export, while an additional 50,000 barrels per day will be allocated for domestic consumption within the region.

The oil destined for export is scheduled to be transported via the North Oil Company's infrastructure to the main export pipeline, which is why the company's delegation is now in Erbil to finalize the operational details.

The resumption of these exports would mark a breakthrough in a standoff that began in March 2023.

The halt was triggered by a ruling from an arbitration court at the International Chamber of Commerce in Paris, which found that Türkiye had violated a 1973 pipeline agreement by allowing the KRG to export oil independently between 2014 and 2018 without the consent of the federal government in Baghdad. 

The court ordered Türkiye to pay Baghdad $1.5 billion in compensation. Although Türkiye has appealed the ruling, it has also expressed its readiness to facilitate the resumption of oil flows under a new, mutually agreed-upon framework.

The 18-month suspension has had a devastating impact on the economies of both the Kurdistan Region and federal Iraq. The KRG was deprived of its primary source of independent revenue, forcing it to rely on often delayed and politically fraught budget transfers from Baghdad to pay the salaries of its public sector employees.

For Iraq, the halt has meant the loss of a significant volume of oil exports at a time of fluctuating global energy prices. The ECO IRAQ Observatory, an independent economic monitoring group, has estimated that the suspension has cost Iraq over $11 million every single day, amounting to a staggering loss of more than $4 billion annually.

This chronic dispute, however, is far from a mere technical disagreement. As previously detailed by Kurdistan24, at its core lies what many in the Kurdistan Region view as Baghdad’s long-standing unwillingness to recognize the KRG’s constitutional rights under the 2005 Iraqi Constitution, which granted the region shared authority over its natural resources.

Instead of honoring these commitments, critics argue that successive Iraqi administrations have politicized oil exports, using them as a pressure tool and a form of financial blackmail against the people of Kurdistan by cutting salaries and withholding the region’s rightful share of the federal budget.

The failure to pass a comprehensive federal oil and gas law, despite two decades of promises, has left Iraq's energy sector mired in legal ambiguity and political maneuvering. The ECO IRAQ Observatory has held the Iraqi parliament directly responsible for this legislative paralysis, accusing it of "creating chaos" and allowing the dispute to fester.

The lack of a clear legal framework has not only strangled the Kurdistan Region’s economy but has also damaged Iraq’s international credibility, with foreign investors often viewing Baghdad’s unpredictable policies as a significant deterrent to long-term partnerships.

In recent months, pressure has intensified from all sides to find a lasting solution. International oil companies operating in the Kurdistan Region have been particularly vocal, as the export halt has rendered their significant investments unproductive. Technical preparations for a restart have been underway for weeks.

A source at the Khurmala oil field confirmed to Kurdistan24 that the pipeline from Khurmala to Kawergosk had recently undergone extensive testing, including cleaning, pump maintenance, and a comprehensive review of storage tanks. Workers at the oil field were informed over the weekend that exports were expected to resume within days.

The pending agreement is seen as a critical step toward stabilizing the financial relationship between Erbil and Baghdad.

KRG spokesperson Peshawa Hawramani emphasized that the deal is designed to remove the barriers that have consistently plagued the payment of public sector salaries in the Kurdistan Region, stressing that under its terms, the federal government must uphold its responsibility to disburse these funds without delay.

On Sunday, the Deputy Speaker of the Iraqi Parliament, Shakhawan Abdullah, also announced that agreements had been reached on both oil and non-oil issues, including the crucial matter of salary payments.

As the delegation from Baghdad and Erbil meet to finalize the last steps, there is a palpable sense of cautious optimism that a new chapter in Iraq's energy politics may be about to begin. If the agreement is signed and successfully implemented, it will not only restore a significant flow of oil to global markets and provide a much-needed financial lifeline to the Kurdistan Region, but it will also represent a crucial, if hard-won, step toward a more stable and cooperative relationship between the two governments.