Iraq resumes Kurdish oil exports to Turkey after two-year halt

Iraq restarted crude oil exports from the Kurdistan region to Turkey on Saturday, ending a suspension of over two years caused by legal and technical disagreements.

"Operations started at a rapid pace and with complete smoothness without recording any significant technical problems," Iraq's oil ministry said.

The Kirkuk-Ceyhan pipeline had been offline since March 2023, after the International Chamber of Commerce ruled that Turkey owed Iraq $1.5bn for unauthorised exports conducted by the Kurdish regional authorities.

Turkey's energy minister, Alparslan Bayraktar, also confirmed the resumption of oil shipments from Iraq in a post on social media platform X.

The agreement, which includes Iraq's federal government, the Kurdistan Regional Government (KRG), and international oil companies operating in the region, will initially allow between 180,000 and 190,000 barrels per day (bpd) to flow to Turkey's Ceyhan port.

The United States had reportedly encouraged the parties to reach an agreement to resume oil exports, which could eventually bring as much as 230,000 bpd back to the global market.

The return of Kurdish oil coincides with efforts by Opec+, a group of 24 oil-producing nations, to increase production and gain market share.

Mohammed al-Najjar, Iraq's representative to Opec, told state media that the renewed use of the Kirkuk-Ceyhan pipeline, along with other infrastructure developments at Basra port, would allow the country to boost its export capacity.

He said Opec members had the right to request higher production quotas if their capacity has increased due to new projects.

Bassem Mohamed, undersecretary at Iraq's oil ministry, told Reuters that the restart of Kurdish oil exports is expected to raise Iraq's total crude exports to nearly 3.6 million bpd in the near term.

He also said Iraq would continue to adhere to its Opec production cap of 4.2 million bpd.