Iraq, Kurdistan Agree Oil Export Resumption Via Turkey Pipeline

Iraq and the Kurdish Regional Government (KRG) have reached a landmark agreement to resume oil exports through the Iraq-Turkey pipeline after nearly two years of suspension, with the KRG committing to deliver at least 230,000 barrels per day to Iraq's state oil marketing company, SOMO. The Iraqi Finance Ministry will pay $16 per barrel received, and the deal includes mechanisms for auditing and resolving budget discrepancies between Baghdad and Erbil. Despite the agreement, ongoing drone attacks attributed to Iran-backed militias have disrupted oil production, cutting regional output by approximately 140,000 to 200,000 barrels per day and posing security challenges for oil firms operating in the area. The resumption of exports is expected to ease the $25 billion in lost revenues caused by the suspension that began in March 2023 and will also trigger payments for KRG employees' public-sector salaries. However, companies in the Kurdish region are awaiting clarity on compensation for past dues before fully restarting exports, while joint committees are tasked with auditing spending and finalizing financial details. This deal marks a significant step in resolving the long-standing conflict between Baghdad and Erbil over oil revenues and budget entitlements and comes amid broader shifts in global oil production quotas.