Kurdistan oil exports: Iraq resumes supply after two-year halt; over $35 bn revenue lost during shutdown

Iraq has restarted oil exports from its autonomous Kurdistan region, ending a suspension that lasted more than two years because of legal disputes and pipeline closures.Baghdad’s oil ministry confirmed on Saturday that crude is once again moving through the Iraq-Turkey pipeline. The line, which had been closed since 2023, has been at the centre of long-running disagreements between the federal government and Kurdish authorities in Arbil over who controls the region’s oil wealth.The State Oil Marketing Organisation (SOMO) will now handle 190,000 barrels per day for export and allocate a further 50,000 barrels for local consumption, its director Ali Nizar told AFP. Turkish energy minister Alparslan Batraktar also announced on X that flows through the pipeline had begun again on Saturday morning.Previously, Kurdish officials sold oil abroad without Baghdad’s approval, mainly through Turkey’s Ceyhan port. That practice was halted in March 2023 after the International Chamber of Commerce in Paris ruled the exports illegal and confirmed that only Iraq’s federal government could market the country’s crude.A breakthrough came in July, when Baghdad and Arbil agreed that all oil from Kurdistan’s fields would be transferred to SOMO. Another deal, signed on Thursday with international oil companies, cleared the final hurdle for exports to restart.US secretary of state Marco Rubio welcomed the move, saying Washington had “facilitated” the agreement and that it would “strengthen the mutually beneficial economic partnership between the United States and Iraq”.The stoppage has been costly. The Association of the Petroleum Industry of Kurdistan (APIKUR) estimates Iraq lost more than $35 billion in revenue during the shutdown. Eight oil companies operating in Kurdistan have now signed on to resume exports, though they also want talks with Kurdish authorities within 30 days to address more than $1 billion in unpaid expenses.Norwegian operator DNO ASA has opted out, insisting that resuming exports should only happen “pursuant to agreements that ensure payment surety”.Oil is Iraq’s economic backbone, making up about 90% of state revenue. The country, a founding member of OPEC, currently exports 3.4 million barrels per day, according to SOMO figures reported by the INA news agency.