On February 17 the Kurdistan Regional Government’s (KRG) Natural Resource Minister Kamal Mohammed announced that Kurdish oil exports would resume in March 2025. He said there were no more technical obstacles to stop a resumption.
This came after parliament voted on February 2 to pay oil companies in the KRG $16 per barrel produced and for their sales to go through the State Oil Marketing Organization. This would ensure that businesses would be financed and that exports would be under the supervision of the central government.
Kurdistan’s oil exports were halted in March 2023 after Turkey lost a case to Iraq in the International Chamber of Commerce. The Chamber ruled that Ankara violated an agreement with Baghdad by unilaterally allowing the KRG to export oil through the country. Turkey was ordered to pay Iraq $1.5 billion in damages. Turkey closed its pipeline afterward and it has not opened it since then. Ankara claims it wanted Baghdad and Irbil to come to an agreement over foreign sales but the real reason is spite. It is angry that it lost and there is another case against it as well. This means no matter what the central and regional governments come up with it is unlikely to change Turkey’s opinion.
That was emphasized on February 19 when the Turkish Energy Minister Alparslan Bayraktar told Reuters that there is no plan to have Iraq use its pipeline.
Things are unlikely to change until Iraq makes some major concessions to Turkey. That will probably include either dropping damages or greatly reducing them as well as not moving forward with the second case.
Baghdad may be unwilling to appease Ankara however because it doesn’t need Kurdish exports at this time. Iraq is trying to comply with its OPEC+ production quota. Even though it has brought down its output it is still over its agreed upon level. Having the Kurds export again would boost production and cause more problems for Iraq with its international partners.
In the meantime the Kurdish oil industry has atrophied. Genel Energy who has operated in Kurdistan for the last 22 years is withdrawing from the Taq Taq field. It was the first foreign company to sign an oil deal with the KRG back in 2002. Genel and others have been reluctant to invest in Kurdistan because it has not consistently been paid and then exports were closed down. The Taq Taq field has declined as a result. In 2015 it had a capacity of 155,000 barrels a day in production. By January 2023 it was only pumping out 4,000 barrels a day. It is also facing reservoir issues leading to its reserves to be downgraded.
The Kurds have been the main losers in this dispute between Iraq and Turkey. It has lost its main independent revenue source. That has made it completely dependent upon Baghdad for monthly budget payments to cover its huge costs such as government salaries. Even then it doesn’t have enough funds to pay for everything. If foreign sales were to resume the KRG’s oil fields would also need a large influx of money to boost their production. It is for these reasons that people like the Natural Resource Minister are eager to claim that Turkey will allow its pipeline to be used but it may have to wait some more for that become a reality.
SOURCES
Mayiwar, Sehend, “Kurdistan Region oil exports to resume next month: KRG minister,” Rudaw, 2/17/25
Reuters, "Turkey says 'nothing yet' on Iraq oil pipeline restart,” 2/19/25
Rudaw, "Iraqi parliament amends bill seeking Kurdish oil exports resumption,” 2/2/25
Tahir, Nawaz and Hussein, Mohammed, “As Genel exits Taq Taq field, new hopes for restart,” Iraq Oil Report, 1/31/25
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