Erbil, Baghdad Sign Oil Export Mechanism Agreement
In a major breakthrough, the Kurdistan Regional Government's (KRG) Ministry of Natural Resources and the Iraqi Ministry of Oil have finalized and signed a comprehensive agreement on the mechanism to resume oil exports from the Kurdistan Region, paving the way to end a costly suspension that has been in place since March 2023.
An informed source close to the agreement revealed to Kurdistan24 that the final accord was the culmination of an intensive process that began on July 17. During this period, technical delegations from both ministries conducted visits to all of the Kurdistan Region's oil fields.
Following these on-site assessments of technical issues and a series of extensive discussions, a definitive agreement on the export mechanism was reached on the 11th of this month.
Under the terms of the new mechanism, the daily production from the Kurdistan Region's oil fields will be allocated with 50,000 barrels retained for the region's domestic needs, while the remaining production will be handed over to Iraq's State Oil Marketing Organization (SOMO) for export.
According to information obtained by Kurdistan24, the formal record of the agreement has been signed by more than 20 individuals from both delegations, underscoring the breadth of the consensus.
The signatories included 17 members of the federal government's Ministry of Oil delegation and five members from the KRG's Ministry of Natural Resources delegation. The federal delegation has since concluded its work in the region and returned to Baghdad.
With this crucial bilateral agreement now in place, the final step required for the resumption of oil exports from the Kurdistan Region rests with the federal government in Baghdad.
It is now incumbent upon the federal government to finalize its own talks with the Turkish government to allow the full implementation of the process and the reopening of the pipeline to the port of Ceyhan.
This new agreement comes at a critical time, as oil exports from the Kurdistan Region have been completely halted since March 2023. The halt was triggered by a lawsuit Iraq filed against Türkiye, which resulted in the cessation of exports through the Turkish port.
According to officials from the Kurdistan Regional Government, the prolonged suspension of oil exports has inflicted more than $50 billion in losses on the economies of both Iraq and the Kurdistan Region.
The officials have consistently stressed that no party has benefited from this decision, highlighting the mutual economic damage caused by the export halt.
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