PM Confirms Agreement with Kurdish Region to Resume Oil Exports

Iraq restarted the export of oil from its Kurdish region to Turkey on Saturday after an interruption of more than two years, following what Prime Minister Shia al-Sudani called a historic agreement between Baghdad and the Kurdish regional government.

U.S. Secretary of State Marco Rubio welcomed the agreement, which he said Washington had helped to facilitate.

"This agreement will strengthen the mutually beneficial economic partnership between the United States and Iraq, encourage a more stable investment environment throughout Iraq for U.S. companies, enhance regional energy security, and reinforce Iraq’s sovereignty," Rubio said in a statement.

Under the agreement, Iraq's state oil marketer SOMO will export crude from Kurdish oil fields through a pipeline to Turkey, two Iraqi oil ministry officials with knowledge of the deal told Reuters.

The Kurdistan Regional Government said on X that exports would resume within 48 hours following the tripartite agreement between Iraq's oil ministry, the KRG ministry of natural resources and producing companies.

Flows through the Kirkuk-Ceyhan pipeline have been shut since March 2023, when the International Chamber of Commerce ordered Turkey to pay Iraq $1.5 billion in damages for unauthorised exports by the Kurdish regional authorities.

The Iraqi oil ministry said in a statement it had reached an agreement to deliver all crude from Kurdistan fields, except volumes for local use, to SOMO for export via the pipeline to Ceyhan. The ministry did not specify when flows would restart.

Eight oil companies operating in Iraqi Kurdistan, representing over 90% of production, reached agreements in principle on Wednesday with Iraq’s federal and regional governments to resume exports.

Before the suspension, Iraq was shipping about 230,000 barrels per day through the pipeline.

Turkey is appealing the compensation order but has said it is ready to restart the pipeline.