The Iraqi federal government and the Kurdistan Regional Government (KRG) have reached a historic agreement with eight international oil companies to resume crude exports from the Kurdish region to Turkey through the Kirkuk–Ceyhan pipeline, marking the end of a two-year suspension that strained relations between Baghdad and Erbil.
The deal represents a strategic turning point for Iraq’s oil sector, establishing a new framework of transparency and cooperation between the two governments after years of legal and political disputes.
The agreement, brokered under U.S. mediation, is expected to restore up to 190,000 barrels per day of Kurdish oil to Iraq’s state oil marketer, SOMO, while allocating an additional 50,000 barrels per day for domestic consumption within Kurdistan.
Under the terms, export revenues will be deposited directly into Iraq’s federal treasury, aligning with constitutional requirements and the 2025 federal budget law. The KRG will receive $16 per barrel to cover extraction and transportation costs, pending a future review by an independent international auditor that could adjust the compensation retroactively.
The accord follows years of confrontation over oil sovereignty. In 2023, the International Chamber of Commerce’s arbitration court in Paris ordered Turkey to halt imports of Kurdish oil without Baghdad’s consent, effectively shutting down the Ceyhan pipeline. Iraq’s Federal Supreme Court later ruled that only the federal government has the authority to export crude, ending a decade-long debate over the legality of the KRG’s independent sales.
An authorized Iraqi source told Asharq Al-Awsat that the new arrangement “ensures transparency in oil sales, eliminates smuggling routes, and guarantees that all revenues from across Iraq reach the joint federal treasury.” The source added that reopening the pipeline strengthens Iraq’s negotiating position with Turkey in ongoing arbitration and future pipeline renewal talks.
U.S. Secretary of State Mike Rubio welcomed the deal, emphasizing Washington’s role in facilitating the negotiations. “We commend the announcement of the agreement between Baghdad and Erbil,” Rubio said in a statement. “This U.S.-facilitated accord will enhance regional security and deliver tangible benefits for both Americans and Iraqis.”
In Baghdad, the agreement was hailed as a milestone for national unity and economic reform. Prime Minister Mohammed Shia’ al-Sudani and Parliament Speaker Mahmoud al-Mashhadani both described it as a pivotal step toward equitable wealth distribution. A statement from the Prime Minister’s Office said the deal would “diversify Iraq’s export outlets, strengthen political and social stability, and pave the way for the upcoming parliamentary elections in November.”
Technically, the North Oil Company will handle crude transfers at Zakho near the Turkish border, feeding the oil into the IT1-1 pipeline to the Ceyhan terminal, with SOMO overseeing marketing and revenue management to prevent past irregularities.
The Kurdistan Regional Government, led by Prime Minister Masrour Barzani, confirmed that exports will resume within 48 hours. Barzani said the deal “removes a major obstacle to securing financial entitlements for the people of Kurdistan and restores the region’s access to global energy markets.”
The historic agreement marks a long-awaited reconciliation between Baghdad and Erbil and signals a potential new era of coordinated energy policy, financial transparency, and shared prosperity for Iraq.
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