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The central Iraqi government has decided to start delivering crude oil from Kurdistan to the state-owned oil company or the oil ministry, local media reported, noting that the price that Baghdad is going to pay to the regional government of Kurdistan is yet to be determined.
For starters, however, Baghdad would pay Erbil $16 per barrel of crude until all related expenses are calculated, Iraq News reports.
Deliveries of Kurdish crude oil have been suspended for over a year amid a dispute between the central government in Baghdad and Turkey over who had the power to authorize these deliveries. The impasse followed an International Chamber of Commerce ruling in March 2023. The ICC ruled in favor of Iraq, which had argued that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq.
The ruling had an impact on international oil companies operating in Kurdistan, which suspended operations until they had clarity on any changes in their terms of operation in the region. There was also a dispute between the government in Baghdad and the one in Erbil over these oil deliveries and who gets to keep the money from their sales on international markets.
At one point, OPEC also joined the party, reportedly asking the Kurdistan government to allow the export of 200,000 bpd of crude via the Turkish port of Ceyhan. The Kurdish news agency that published the report back in April said that the request had then been forwarded to the government in Baghdad.
Iraq is OPEC’s second-largest oil exporter, right after Saudi Arabia. Kurdistan is one of its main producing regions, accounting for 0.5% of the global total in oil flows prior to the 2023 export suspension resulting from the Turkey-Iraq dispute.
