Restart of Kurdistan Oil Exports Still in Limbo

Despite assurances from the federal Iraqi government that the resumption of oil exports from Kurdistan is imminent, the foreign oil firms operating in the semi-autonomous Iraqi region said on Friday they would not be resuming oil exports today.

Last week, Iraq’s Oil Minister Hayyan Abdul Ghani said that Iraq and Kurdistan expect to complete all work to resume oil exports from the semi-autonomous region by the end of March, following a two-year hiatus due to a dispute over authority over crude flows.

Oil exports from Kurdistan have now been halted for nearly two years, after they were shut in since March 2023 due to a dispute over who should authorize the Kurdish exports.

The resumption of Kurdistan’s exports would add about 400,000 barrels per day (bpd) to overall Iraqi oil supply, although it is not clear yet how much of this would be allocated to international markets and how much would be kept for domestic consumption in Iraq.

On Friday, Iraq’s federal government said it would announce the resumption of Kurdistan’s oil exports within hours. Initially, 185,000 bpd of crude is expected to be exported by Iraq’s state oil marketing company SOMO.

However, the Association of the Petroleum Industry of Kurdistan (APIKUR), which groups foreign oil producers accounting for 60% of Kurdistan’s crude production, said on Friday that “APIKUR member companies do not have agreements that would lead to resuming oil exports today.”

“As has been repeatedly made clear, APIKUR member companies remain prepared to immediately resume exports as soon as formal agreements are reached to provide surety of payment for past and future exports consistent with our existing contractual legal and commercial terms,” the association said, adding that “There has not yet been any outreach in this regard to APIKUR member companies.”

Foreign oil producers in Kurdistan want firm agreements and assurances before resuming exports, while Baghdad is being pressured by the U.S. to allow Kurdish supply on the market, as the Trump Administration is looking to force a significant reduction of Iranian oil exports under the “maximum pressure” campaign.

By Tsvetana Paraskova for Oilprice.com

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