KRG says agreement reached with Baghdad to resume oil exports

ERBIL — The Kurdistan Regional Government announced Sunday that it has reached an agreement with the Iraqi federal government to resume oil exports from the region.

A statement from the KRG’s Ministry of Natural Resources released on February 23, 2025, said that after discussions with the Federal Ministry of Oil, both sides agreed to restart oil exports “based on available capacity.” A joint technical team “has been formed” to inspect export pipelines and verify that all systems are operational. Representatives from both the KRG and the federal government will conduct the inspections.

The KRG reiterated its commitment to the Federal General Budget Law, which establishes the financial and operational framework governing oil exports. The development coincides with a recent statement from the Association of the Petroleum Industry of Kurdistan, which declared its readiness to resume exports provided that any new deal respects “existing contractual, commercial, and economic terms” for member companies. APIKUR stressed the importance of having written agreements with both the Iraqi government and the KRG to ensure “payment transparency and surety without political interference.”

Iraq’s Federal Ministry of Oil echoed those sentiments in a statement issued yesterday. The ministry confirmed that it is finalizing procedures to restart shipments through the Ceyhan terminal and urged the KRG to transfer oil from operational fields to the State Organization for Marketing of Oil in accordance with the Federal Budget Law and its amendments.

Responding to the federal call, the KRG negotiating delegation said it was prepared to comply with the centralized oil marketing law. However, the delegation noted that certain conditions must be met before exports resume. “During our joint meeting with the federal Ministry of Oil on Feb. 18, 2025, in Erbil, it was confirmed that implementing the law requires agreeing on the quantities allocated for local consumption based on the region’s actual needs and commitments, similar to other parts of Iraq,” the delegation stated.

Prior to a pipeline shutdown in March 2023, approximately 450,000 barrels per day were transported via the Iraq-Turkey Pipeline. That stoppage, resulting from legal disputes and an arbitration ruling against Türkiye for allowing Kurdish oil exports without Baghdad’s consent, has reportedly cost Iraq an estimated $20 billion in lost revenues.

Efforts to resolve the impasse have intensified in recent weeks. On Feb. 17, Iraqi Oil Minister Hayyan Abdul Ghani announced a new pact with the KRG to ensure daily exports would not drop below 300,000 barrels. Kamal Mohammed Saleh, the acting natural resources minister for the Kurdistan Region, confirmed that “all obstacles have been resolved” and suggested that exports could resume soon, noting that the legal procedures have been completed.

Iraq’s newly approved amendments to the federal budget, passed on Feb. 2, 2025, includes Article 12, which allocates $16 per barrel to cover production and transportation costs for foreign oil companies operating in the Kurdistan Region—a change welcomed by APIKUR.