Iraqi Kurdish government and Baghdad make progress on restarting oil exports

The ICC in Paris eliminated the Kurdistan Regional Government's (KRG) independent pipeline exports through Turkey after granting the federal gov of Iraq rights to market all Iraqi oil.

By THE MEDIA LINE NOVEMBER 10, 2024 11:59 Updated: NOVEMBER 10, 2024 12:00

Iraqi Prime Minister Mohammed Shia al-Sudani holds a joint news conference with his Kurdish counterpart Masrour Barzani in Baghdad, Iraq April 4, 2023. (photo credit: IRAQI PRIME MINISTER MEDIA OFFICE/HANDOUT VIA REUTERS)

Iraq’s Kurdish regional government expressed optimism Wednesday about resuming oil exports “as soon as possible” after Baghdad offered increased cost payments to oil producers, signaling progress in a dispute paused since March 2023.  

The International Chamber of Commerce in Paris effectively eliminated the Kurdistan Regional Government's (KRG) independent pipeline exports through Turkey after granting the federal government of Iraq exclusive rights to market all Iraqi oil. 

Based out of the regional capital, Erbil, the KRG is the official political structure governing Iraq’s predominantly Kurdish northern provinces. Kurds make up roughly 17% of all Iraqis, trailing only behind nearby Turkey and Iran in total population.  

Baghdad amended budget

On Tuesday, Baghdad amended its budget to form an independent body within two months to set production costs for the region while temporarily increasing payments to $16 per barrel—a $10 premium over Iraq’s southern oil fields.  

“This move by Baghdad is an opportunity to resolve the problem and resume oil exports to international markets as soon as possible,” the KRG said in an official statement.  

BAGHDAD, IRAQ, earlier this week. Iraq can learn from the processes Israel struggled through to create an open and democratic society. (credit: KHALID AL MOUSILY / REUTERS)

The Association of the Petroleum Industry of Kurdistan, representing international oil companies in the region, said the agreement could generate $1 billion monthly for the Kurdish region and its partners. The halted exports have already cost all parties involved approximately $20 billion.  

Despite the promising step, energy analysts warned that major negotiations still remain.