In a significant development for regional energy dynamics, Turkish Ambassador to Iraq, Ali Reza Gunay, announced Turkey’s preparedness to recommence oil exports from Iraqi Kurdistan. This declaration emerged from Gunay’s meeting with Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani, as per a statement from the KRG.

The meeting, which revolved around the latest regional developments and strategies to bolster bilateral relations and trade, particularly highlighted the urgency of resuming oil exports through Turkey’s Ceyhan port. Ambassador Gunay affirmed Turkey’s readiness to restart the export process, marking a pivotal moment in the ongoing energy discourse between the two regions.

This move follows the Iraqi Oil Minister Hayan Abdul-Ghani’s November 12 announcement of an impending agreement involving the KRG, oil companies, and Ankara to restore the flow of oil exports from Iraq to Turkey. The discussion, which occurred during a meeting in Erbil with the KRG Prime Minister, aims to resolve the months-long halt in oil exports.

The cessation of oil transportation from Kurdistan to the Ceyhan port on March 25 was a consequence of an international arbitration decision. This ruling mandated Turkey to compensate Baghdad for the unauthorized export of Kurdistan’s oil without Baghdad’s approval from 2014 to 2018, breaching the 1973 pipeline agreement.

International Oil Companies

Iraqi oil sector officials are set to convene with representatives from international oil companies and Iraqi Kurdish authorities in early December. These talks will focus on amending contracts, shifting from current production-sharing to profit-sharing agreements, essential for resuming oil exports through Turkey.

Bassem Khudair, the Undersecretary of the Ministry of Oil for Extraction Affairs, indicated to Reuters that the restoration of halted crude oil exports depends on these pivotal negotiations. Khudair expressed optimism about reaching an agreement, noting the eagerness of these companies to continue their operations in the region without complications.

The halt in March, which affected the export of 450,000 barrels per day, followed the International Chamber of Commerce’s ruling in an arbitration case. The decision required Turkey to pay Iraq $1.5 billion in compensation for damages incurred by the KRG’s unauthorized oil exports between 2014 and 2018, setting the stage for the current negotiations and prospective resumption of oil exports.