Talks Over Restarting KRG Oil Exports Stall

On February 28 Iraq’s Oil Ministry announced that Kurdish petroleum exports would start within hours. Then nothing happened. While Baghdad and Irbil had been holding negotiations for months over the issue neither side included the energy companies. In March there have been several meetings with the corporations but no breakthrough.

 

The Association of Petroleum Industry of Kurdistan (APIK) represents 8 international companies that produce 60% of the Kurdistan Regional Government’s (KRG) oil. They want assurances that not only will they be paid by Baghdad for future exports but want their previous debts covered as well. In 2022 and 2023 the corporations were not paid by the KRG for exports due to the region’s financial troubles. APIK is also demanding that they be paid in advance which Baghdad rejects. Finally, the firms are afraid that their payments will be caught up in the central-regional government dispute.

 

The energy companies are making these demands based upon their difficult history in Kurdistan. Originally the KRG was an appealing area for investment because it seemed to have large oil reserves and offered better terms than Baghdad. That did not pan out as the Kurds’ independent oil policy failed. The KRG did not pay them for months and then changed the terms on contracts so their profits were smaller. That was followed by Turkey shutting down its pipeline to the KRG in 2023 out of spite after Ankara lost a court case to Iraq. The corporations started divesting as a result.

 

For Baghdad’s part is wants to control all the terms on future exports. The Oil Ministry changed its position originally saying it would pay $16 per barrel produced in Kurdistan but then said it would only pay that amount for oil that was sold overseas. It also said it would hire an international consultant to estimate a fair fee to pay for production and transportation meaning how much the members of the APIK is still up in the air.

 

With so many differences between the two sides new Kurdish oil exports cannot be expected any time soon.

 

SOURCES

 

Benny, John Aldroubi, Mina, “Iraqi Kurdish oil exports resumption to be announced in hours, ministry says,” The National, 2/28/25

 

Iraq Oil Report, “Disputes between Baghdad and IOCs keep northern oil exports offline,” 3/6/25

 

Al Mada, “Conflicting schedules delay Kurdistan oil exports .. Government promises clash with reality of disputes,” 3/2/25

 

Rasheed, Ahmed, El Dahan, Maha, and Adomaitis, Nerijus, “Kurdish oil export talks between Iraq and oil companies postponed after financial disputes,” Reuters, 3/4/25

 

Reuters, “Iraq invites global oil firms for talks on Kurdistan contracts,” 3/1/25

- “Iraqi Kurdistan oil export talks end without deal despite US push,” 3/6/25

 

Rudaw, “Iraq says may exports Basra oil through Kurdistan Region,” 3/6/25