SEATTLE (Oil Monster): Iraq's state oil marketer announced Tuesday that a breakthrough deal with the Kurdistan Regional Government to restart oil exports through Turkey's Ceyhan port is just around the corner. This development promises to open new export routes for Iraq at a time of heightened geopolitical uncertainty.
Insiders in Iraq's oil and gas sector told The New Arab that exports could resume within 48 hours. Still, one source cautioned that the exact timing remains uncertain, as similar announcements have previously failed to materialise.
The State Oil Marketing Organisation (SOMO) confirmed that Baghdad and Erbil have agreed on a mechanism to resume exports from the Kurdistan Region.
Ali Nizar, SOMO Director, told the Iraqi News Agency (INA) that reaching an agreement required significant coordination by SOMO, the Iraqi Oil Ministry, the KRG Ministry of Natural Resources, and the international oil producers.
On Monday, Erbil, Baghdad, and international oil companies signed a tripartite deal to resume the Kurdistan Region's long-stalled oil exports. The Iraqi Council of Ministers was expected to ratify it at its session on Tuesday.
He added that the agreement is nearly finalised, a mechanism for regional oil pumping is set, and payment assurances have been provided to international companies. The government will announce the signing date soon.
Iraq's federal and Kurdish regional governments, along with oil companies, aim to revive the flow of approximately 230,000 barrels per day of Kurdish oil through Turkey—a trade halted since March 2023.
Oil companies initially expected $16 per barrel produced, but under the new agreement, they will receive crude oil of equal value, ensuring payment security as they requested. The deal also allocates 50,000 barrels per day (bpd) for domestic consumption in the Kurdistan Region.
Nizar also confirmed Iraq's commitment to OPEC+ oil production targets and voluntary cuts.
"We clarify that Iraq's voluntary OPEC+ reductions and baseline cuts are still in effect," he said.
He stressed that Iraq is fully committed to OPEC agreements and compensating for past overproduction, based on detailed market studies.
He noted that secondary sources confirm Iraq's high compliance, documented transparently and professionally.
Another industry insider told TNA that the Iraqi government may not be fully committed to resolving the KRG oil dispute permanently, suggesting that both Baghdad and the KRG have been hesitant to support a comprehensive hydrocarbon law.
The source noted that passing the law would require Baghdad to acknowledge the Iraqi Kurdistan Region's right to manage its own oil. Baghdad is cautious, concerned that this could encourage other provinces, such as Basra, to seek greater autonomy.
The same source described the export deal as a temporary measure shaped by foreign pressure and upcoming parliamentary elections scheduled for 11 November, suggesting that selling oil through SOMO benefits the KRG through higher revenues and improved transparency.
Any resumption of flows will require the Iraqi government to coordinate with Turkey and implement the agreed-upon export procedures via the Turkish port of Ceyhan, as detailed in the agreement.
Ankara halted 450,000 barrels per day of exports from Iraq's north on 25 March after an international tribunal ruled in a nine-year-old dispute that Baghdad was justified in insisting on overseeing all Iraqi oil exports.
The tribunal run by the International Chamber of Commerce (ICC) ordered Turkey to pay Baghdad damages of US$1.5 billion for allowing the Kurdistan Regional Government (KRG) to export oil between 2014 and 2018 without the Iraqi government's consent.
Iraq ranks as the second-largest producer within the Organisation of the Petroleum Exporting Countries (OPEC).
DNO, the Norwegian oil and gas operator, today announced that it welcomes reports that agreements have been reached between the Federal Government of Iraq, the Kurdistan Regional Government, and international oil companies to resume crude oil exports from Kurdistan through the Iraq-Turkey Pipeline.
DNO stated that it is eager to resume exports, but will do so only under agreements that ensure payment security for both past arrears and future exports, based on the legal, economic, and commercial terms of its production sharing contracts with the Iraqi Kurdistan region.
Courtesy: www.newarab.com
