Iraq Resumes Oil Exports via Turkey After Deal with Kurdistan Region

Iraq resumed crude oil exports through Turkey’s Mediterranean port of Port of Ceyhan following a breakthrough agreement between the federal government in Baghdad and the Kurdistan Regional Government, marking a significant step toward restoring disrupted energy flows.

The restart comes after weeks of halted exports caused by the escalating U.S.-Israeli conflict with Iran, which has severely disrupted regional supply chains and constrained global oil markets.

According to Iraq’s North Oil Company, shipments of Kirkuk crude have resumed at an initial capacity of around 250,000 barrels per day. However, Deputy Oil Minister for Upstream Affairs, Bassem Mohammed, indicated that current flows stand closer to 170,000 barrels per day, with plans to scale up gradually.

Officials from the Kurdistan Regional Government confirmed that a joint technical committee has been formed to oversee the resumption process. Under the agreement, oil revenues will be transferred to the federal treasury, while additional security measures are being implemented to safeguard infrastructure and ensure uninterrupted operations.

Kurdistan Prime Minister Masrour Barzani described the deal as a necessary compromise under exceptional circumstances, signaling a temporary easing of long-standing tensions between Baghdad and Erbil.

Barzani also revealed discussions with U.S. envoy Tom Barrack on facilitating the export restart, emphasizing the need to prioritize economic stability and public welfare.

The agreement comes despite ongoing disputes over revenue sharing and trade controls, including Baghdad’s recent implementation of an electronic customs system that Kurdish authorities view as an infringement on regional autonomy.

The resumption is critical for Iraq’s strained economy. Oil production in southern Iraq has reportedly dropped by nearly 70%, falling to about 1.3 million barrels per day, largely due to the closure of the Strait of Hormuz, a chokepoint for roughly 20% of global oil supply.

With oil revenues accounting for more than 90% of government income, the disruption has intensified fiscal pressures and raised concerns over the government’s ability to meet public spending obligations, including salaries.

To mitigate losses, Iraq’s state oil marketer SOMO has signed agreements with international companies to export crude via alternative routes through Turkey, Jordan, and Syria.

The reopening of the Ceyhan export route offers a crucial lifeline for Iraq’s energy sector and public finances. However, the sustainability of flows will depend on both the fragile political understanding between Baghdad and Erbil and the broader security environment across the region.