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Ministerial Committee Meeting Ends Without Results

The ministerial committee of the Iraqi Council of Ministers reached no result or decision and ended its meeting. Yesterday, the ministerial committee held its first meeting, and according to a statement from the Ministry of Planning, chaired by Minister Dr. Mohammed Tamim, the meeting discussed both drafts (of the agreements). However, there was no indication of any agreement or progress. A well-informed source told Draw Media that during yesterday’s meeting, no agreement or outcome was reached, and there was no consensus on either draft. This is because Baghdad disagreed with one of the key articles in the draft, particularly regarding the handover of oil and the Kurdistan Region's commitment to the federal budget law and decisions of the Federal Supreme Court of Iraq. Today’s meeting was also cancelled, even though it was scheduled to be completed within 48 hours—meaning the committee was supposed to submit its final report to the Prime Minister of Iraq for a final decision. In last Tuesday’s meeting of the Iraqi Council of Ministers, a decision was made to form a ministerial committee to resolve the salary and oil dispute. The committee members are: Mohammed Tamim – Minister of Planning (Committee Chair) Khalid Shwani – Minister of Justice Salih Mahdi Hasnawi – Minister of Health Bangin Rekani – Minister of Reconstruction Naeem Aboudi – Minister of Higher Education

Salaries and Revenues of the Kurdistan Regional Government After Oil Export Halt

Following the Paris court’s decision to halt the Kurdistan Region’s independent oil exports, significant financial changes have occurred in the Region’s relationship with Baghdad. 🔹 Baghdad's Funding to the KRG: From March 25, 2023, to June 2025 (27 months), the Iraqi government transferred around 19.6 trillion IQD to the Kurdistan Regional Government (KRG). This amount covered 21 months of salaries in full (100%). 🔹 Oil Revenues of the KRG: During the same period, the Region generated about 9.94 trillion IQD from oil revenues. Only 6% of this amount (598.5 billion IQD) was returned to the Iraqi government, while the remaining 94% (over 9.3 trillion IQD) stayed within the KRG. 🔹 Monthly Oil Sales Estimate: Based on unofficial data, the KRG's oil sales currently generate approximately $297 million per month, of which: 72% (about $213 million) goes to the KRG, 28% (around $84 million) goes to the oil companies. None of this revenue is returned to the KRG's Ministry of Finance officially. 🔹 Oil Production & Pricing: The Region operates eight oil fields producing around 300,000 barrels daily, totaling roughly 9 million barrels monthly. The average sale price per barrel is estimated at $34. 🔹 Backstory – Paris Court Ruling: Though the Paris court ruling barred the KRG from exporting oil via Turkey’s Ceyhan port, the KRG continued producing and selling oil, mostly via unofficial or domestic channels, often below the global market price. This lack of transparency has deepened fiscal disputes with Baghdad. 🔹 Federal Budget Allocations: Due to the export halt, Baghdad was forced to allocate KRG’s share from the federal budget. Official documents confirm: In 2023, Baghdad sent 4.7 trillion IQD to the KRG. In 2024, the total rose to 10.78 trillion IQD. In early 2025, 4.1 trillion IQD was sent. However, in May and June 2025, no payments were made. 🔹 Missed Salary Months: Despite receiving full funding for 21 months, the KRG failed to pay salaries for six specific months

Iraqi Army Seeks Control of Qambar Oil Field in Disputed Area

The Iraqi army is reportedly preparing to take control of the Qambar oil field, located within the disputed area near the border between Diyala and Sulaymaniyah provinces, currently under Peshmerga control. According to the pro-Asaib Ahl al-Haq TV channel "Al-Ahd", citing security sources, tension and unrest have escalated around the Qambar oil field, which lies between Diyala and Sulaymaniyah in the area known as Dwanza Imam village. An Iraqi army unit has reportedly moved toward the area, with preparations underway to establish federal authority over this strategic location. Peshmerga leaders view this move as provocative and warn that it could trigger a crisis. Sources noted that the area is currently under the control of forces affiliated with the Patriotic Union of Kurdistan (PUK). Amid warnings of potential armed clashes in one of the most disputed areas between the federal and regional governments, local villagers have expressed concern over recent unusual military activity, including the presence of unidentified troops. Political sources familiar with the situation predict the crisis could escalate in the coming days if Baghdad and Erbil fail to take coordinated steps to de-escalate tensions and prevent any armed conflict—raising fears of a broader threat to the stability of the disputed boundary between Diyala and Sulaymaniyah.

Iraq and Kurdistan Region Near Final Deal on Salaries, Oil Exports, and Internal Revenues

The Kurdistan Region and Baghdad have reached a preliminary agreement on salaries, the budget, and oil. Today, the Iraqi Council of Ministers for Economic Affairs will prepare the final report on the agreement. Baghdad is requesting the delivery of 280,000 barrels per day to SOMO and a monthly transfer of 150 billion dinars in internal revenues. The Kurdistan Region, in turn, wants Baghdad to cover salaries, operating expenses, and investment spending for the Region, with $16 allocated per barrel for costs and 125,000 barrels designated for local use. The Iraqi Economic Affairs Council, chaired by Dr. Fuad Hussein and including the Ministers of Finance, Planning, and Oil, will finalize the agreement. A final decision will be made at the Council of Ministers' meeting. According to the information: Baghdad demands around 150 billion dinars per month in internal revenue and the delivery of 280,000 barrels of oil daily via SOMO. In return, Baghdad would cover the Region's public sector salaries, operational costs, and oil company expenditures. The Kurdistan Region’s demands include: Baghdad to send salaries of the Region’s public servants. Coverage of operational and investment costs. Salaries to be paid from actual expenses. Oil company debts to be paid. The Region to provide 280,000 barrels to SOMO and 115,000 barrels for local use. $16 to be spent per barrel. Oil companies also have several demands: No changes made to their contracts. Their debts amounting to about $1 billion should be paid. Revenues from their projects in the oil fields to be settled. According to follow-ups: The Iraqi government requests 50% of total internal revenues, estimated at 300 billion dinars, which means 150 billion dinars monthly to be delivered to the Ministry of Finance. The Kurdistan Region is to deliver 280,000 barrels of oil daily via SOMO, with the revenue returned to Iraq’s Ministry of Finance. In return, Baghdad will initially pay the May salaries this week as a goodwill gesture and, following a complete agreement, will cover the June salaries as well. For each barrel, Baghdad will pay $16 to the producing companies. With the daily delivery of 280,000 barrels to SOMO and the international market price of around $65 per barrel, the daily revenue would be $18.2 million, and the monthly (8.4 million barrels) revenue would reach $546 million. Of this, $16 per barrel (totaling $134 million monthly) will go to the companies, meaning the Iraqi government retains $412 million. If the Region sells the 280,000 barrels daily at its local price of $33 per barrel, it would generate $277 million monthly—$269 million less than the $546 million possible through SOMO.

KRG to Supply 280,000 Barrels of Oil Daily via SOMO

A technical delegation from Baghdad returned after meetings in the Kurdistan Region, while the KRG delegation also arrived in Baghdad. Baghdad demands a monthly transfer of 150 billion Iraqi dinars from the KRG’s internal revenues and the daily delivery of 280,000 barrels of oil through SOMO. In return, Baghdad will cover public salaries and oil company expenses. Over two days, a technical delegation from the Iraqi government visited the Kurdistan Region and met with the KRG Ministry of Finance, the Ministry of Natural Resources, the Council of Ministers’ Presidency, and oil companies. The Iraqi delegation has now returned to Baghdad. Today, a delegation from the KRG’s Ministry of Natural Resources and the Council of Ministers arrived in Baghdad and held meetings with Iraq’s Ministry of Oil and SOMO, indicating progress toward an agreement. According to follow-up information: The Iraqi government is requesting 50% of the KRG’s internal revenues. These revenues are estimated at 300 billion IQD monthly, meaning the KRG must transfer 150 billion IQD monthly to Iraq’s Ministry of Finance. The KRG must export 280,000 barrels of oil daily through SOMO, and the revenue will go to Iraq’s Ministry of Finance. In return, Baghdad is expected to pay the salaries for May within this week and will pay June’s salaries after a final agreement is reached. For each barrel, $16 is allocated to oil production companies. With a global market price of approximately $65 per barrel, 280,000 barrels generate about $18.2 million per day, or 8.4 million barrels monthly would yield $546 million in monthly revenue. Out of this, $134 million is spent on production companies ($16 per barrel), meaning the Iraqi government retains about $412 million monthly. If the KRG were to sell the oil independently at its current price of $33 per barrel, the monthly revenue would be $277 million—$269 million less than selling through SOMO at global prices.

General Revenues and Expenditures of Iraq in Q1 2025

🔻 The Iraqi Ministry of Finance released three monthly reports detailing revenues and expenditures during the first quarter of 2025. According to these reports: As of March 2025, Iraq’s total public revenue from both oil and non-oil sources reached approximately IQD 27.249 trillion. Of this: IQD 24.912 trillion (91%) came from oil revenues. IQD 2.337 trillion (9%) came from non-oil revenues. Total expenditures, including both operational and investment spending, exceeded IQD 28.139 trillion, broken down as: 95% for operational (recurrent) expenses. 5% for investment (capital) expenditures. The Ministry of Finance transferred more than IQD 3.086 trillion to the Kurdistan Regional Government (KRG), allocated as: About IQD 2.355 trillion for salaries of public servants. Around IQD 2.856 billion for emergency assistance and other expenditures. Over IQD 728.6 billion for social protection programs. After comparing total expenditures with total revenues, expenditures exceeded revenues by 3%, resulting in a deficit of more than IQD 890.7 billion. Around IQD 2.210 trillion was spent on Iraq’s three top presidencies: The Council of Representatives (Parliament): over IQD 144 billion. The Presidency of the Republic: more than IQD 11.4 billion. The Council of Ministers (Cabinet): over IQD 2.054 trillion. 1. KRG Funding Breakdown (Q1 2025) According to the Ministry of Finance’s reports for January–March 2025, the Iraqi government provided the KRG with a total of IQD 3.086 trillion, divided as follows: IQD 2.355 trillion (76.3%) – Salaries for public employees. IQD 2.856 billion (0.1%) – Emergency, grants, and other assistance. IQD 728.6 billion (23.6%) – Social welfare programs. 2. Iraq’s Total Revenues (Q1 2025) Total revenue reached IQD 27.249 trillion, composed of: IQD 24.912 trillion (91%) – Oil revenue. IQD 2.337 trillion (9%) – Non-oil revenue. 3. Iraq’s Total Expenditures (Q1 2025) Total spending amounted to IQD 28.139 trillion, broken down as: Operational (recurrent): IQD 26.662 trillion (95%) Investment (capital): IQD 1.477 trillion (5%) 4. Investment Spending by Sector (Q1 2025) From the IQD 1.477 trillion spent on capital projects: Agriculture: IQD 40.1 billion (3%) Industry: IQD 291.3 billion (20%) Transport & Communication: IQD 255.9 billion (17%) Public Services & Roads: IQD 740.6 billion (50%) Education: IQD 149.1 billion (10%) 5. Revenue vs. Expenditure Comparison Total Revenue: IQD 27.249 trillion Total Expenditure: IQD 28.139 trillion Deficit: IQD 890.7 billion (≈3%) 6. Expenditures of Iraq’s Three Presidencies (Q1 2025) Combined expenditures reached IQD 2.210 trillion, detailed as: Council of Representatives: IQD 144.4 billion Only IQD 164,000 was for investment. Presidency of the Republic: IQD 11.4 billion Only IQD 14,000 was for investment. Council of Ministers: IQD 2.054 trillion Operational: IQD 1.865 trillion (91%) Investment: IQD 189.1 billion (9%) Sources: Monthly budget execution reports published by the Iraqi Ministry of Finance: State Account – January 2025 State Account – February 2025 State Account – March 2025 📎 https://www.mof.gov.iq/pages/MOFPublicReports.aspx

Dispute between court and council heads leads to withdrawal of top federal judges.

🔻Shiite factions attempt to control domestic politics Source: Asharq Al-Awsat Newspaper — The withdrawal of members from Iraq’s highest constitutional court threatens the timely conduct of parliamentary elections scheduled for the end of this year, due to the lack of a legal framework to endorse the results. The withdrawal of six judges from the Federal Supreme Court triggered strong reactions. Local media reported that the move followed a request by the court’s president, Jassim Muhammad, urging Iraqi authorities to convene a meeting to address disputes between the Court of Cassation and the Federal Court. However, politicians cited by the newspaper pointed to a deeper cause: a rift between the president of the Federal Supreme Court, Judge Jassim Omeri, and the head of the Judicial Council, Judge Faiq Zaidan. The Coordination Framework alliance — a coalition of ruling Shiite groups — is actively trying to manage the internal political situation and prevent instability, particularly amid ongoing regional tensions between Iran and Israel. Sources familiar with the matter said the alliance fears that the judges’ withdrawal could create a legal vacuum and political uncertainty.

Iraq begins initiative to enhance gasoline standards

As part of its broader efforts to upgrade the refining sector and boost the output of high-quality petroleum products, Iraq has initiated trial operations for a gasoline hydrogenation and improvement project with a daily capacity of 12,000 barrels. Adnan Hamoud, the Oil Ministry’s Undersecretary for Refining Affairs, announced the launch of the trial phase on Saturday. He noted that the project aligns with the Ministry’s strategy to enhance and expand petroleum product output. This development was highlighted during Hamoud’s visit to the Kirkuk refinery, which is considered a vital part of Iraq’s refining infrastructure. He also emphasized that the government’s long-term strategy involves modernizing the refining sector, increasing domestic production of oil derivatives, satisfying internal demand, and exporting any surplus. Although Iraq continues to face rising fuel consumption and a widening gap between supply and demand—as seen last June—Oil Minister Hayan Abdul-Ghani has outlined the country’s path to achieving gasoline self-sufficiency. Abdul-Ghani reported that Iraq’s daily gasoline consumption stands at about 28 million liters, while domestic production ranges between 21 and 22 million liters per day. However, he affirmed that Iraq is on track to become self-sufficient in gasoline by 2025.

Iran's non-oil export to Iraq can rise to $20b

Tehran Times The chairman of Iran-Iraq Joint Chamber of Commerce said that the value of Iran's annual non-oil export to Iraq can be increased to $20 billion. Iran and Iraq have a strategic relationship that can grow and develop with an economic focus, Yahya Al-e Eshaq noted. Iran and Iraq have a strategic relationship that can grow and develop with an economic focus, Yahya Al-e Eshaq noted. Last year, the value of our non-oil export to Iraq was about $12 billion, and it is predicted that this figure will increase to $20 billion in the coming years, which we believe is achievable and possible, he reiterated. According to an official with the Islamic Republic of Iran Customs Administration (IRICA), Iran exported non-oil commodities valued at $11.9 billion to Iraq in the past Iranian calendar year, which ended on March 20, 2025. Abolfazl Akbarpour, the deputy head of IRICA for planning and international affairs, said that Iraq was Iranís second top non-oil export destination in the previous year. Considering Iran's vast export capacity and Iraqs large market for Iranian goods, both sides want to expand the volume of bilateral economic exchanges. Iran and Iraq have set a target of $20 billion in annual trade, and businessmen and authorities of both countries are determined to meet that target. In late May 2024, the head of the Department of Spatial Planning and Regional Planning of the Iranian Planning and Budget Organization (PBO) said that Iran exports some 2,200 products, valued at $12 billion, to neighboring Iraq annually. Speaking in a meeting entitled ìReviewing opportunities and challenges of attracting Iraqi investors and strengthening trade relations between the two countries in line with demarcating Iran in the regional value chain, Jafar Hosseini said that Iraq, benefiting from $85 billion foreign currency reserves, 130 tons of gold reserves, and 147 billion barrels of proven reserves of crude oil, is among the richest countries in West Asia. Currently, Iran exports over 2,200 various types of goods and products to Iraq, he said, adding that more than half of the active Iranian traders are present in the Iraqi market. Developing the trade infrastructures to facilitate trade between the two countries, encouraging traders to invest in Iraq, promoting trade through dispatching and admitting trade delegations and participating in exhibitions of the two countries, etc. are suggested to strengthen the trade and economic relations between Iran and Iraq, he underlined. In an interview in mid-December last year, the ambassador of Iran in Iraq praised the economic relations between the two sides and expressed hope that these relations will be more and better. Mohammad Kazem Ale-Sadeq announced the value of commercial exchanges between the two countries, and stated that economic relations between Iran and Iraq are very good, and expressed hope that these relations will improve. The envoy further noted: Iraq is an important country in the region, and we have very important economic, political, and social relations with this neighbor. In early May 2024, Tehran hosted the 6th meeting of the Iran-Iraq Joint Economic Committee. The two-day event was co-chaired by the former Iranian Finance and Economic Affairs Minister Ehsan Khandouzi and Iraqi Minister of Commerce Atheer Daoud Al-Ghurairi. On the first day of the meeting, specialized committees including commercial, industrial, agricultural, standardization and quality control, energy, finance, banking, investment and Insurance, shipping, transport, and Customs, scientific, educational, tourism, health, as well as sports consulate held meetings to discuss areas for cooperation. Increasing non-oil exports to the neighboring countries is one of the major plans that the Iranian government has been pursuing in recent years. Iran shares land or water borders with 15 countries namely the United Arab Emirates (UAE), Afghanistan, Armenia, Azerbaijan, Bahrain, Iraq, Kuwait, Kazakhstan, Oman, Pakistan, Qatar, Russia, Turkey, Turkmenistan, and Saudi Arabia.

Iraq reaches diesel milestone, eyes end to gas flaring

Shafaq News Iraq has reached self-sufficiency in gas oil (diesel) and aims to eliminate gas flaring by 2028, Oil Minister Hayan Abdul Ghani said on Sunday, while warning that the halt in Kurdistan’s oil exports is costing the country 300,000 barrels per day. Speaking in Basra during a visit to the Oil Training Institute, Abdul Ghani said gas capture rates improved from 53% at the start of Prime Minister Mohammed Shia al-Sudani’s government to 67% today, and are expected to reach 70% by the end of 2025. “We will fully end flaring and utilize all associated gas by 2028,” the minister said. He added that Iraq is diversifying its gas imports beyond Iran. A 40-kilometer pipeline has been completed in Basra, and another 75-km line from Mahmudiya to Bismayah will be finished this month despite delays. Iraq is in talks to import 500 to 750 million cubic feet of liquefied gas to power electricity stations. Diesel reserves now exceed 1 million cubic meters—five times previous levels—according to Abdul Ghani. The minister noted that fuel imports, which once cost $5 billion annually, have dropped sharply, with only gasoline still being imported. “Gasoline imports will end by the close of this year,” he said. On stalled oil exports from the Kurdistan Region, Minister Abdul Ghani said Baghdad had agreed with Erbil to amend the federal budget law to facilitate exports via Turkiye’s Ceyhan port. However, unexpected conditions imposed by the Kurdistan Regional Government (KRG) on oil company payments stalled the deal. “We proposed appointing a consulting firm to determine per-barrel production costs, but the KRG rejected this,” he said. “The continued suspension of exports is costing Iraq 300,000 barrels per day—barrels that count against Iraq’s OPEC quota without generating any revenue.”

Iraq Exports Over 106 Million Barrels of Crude Oil in March

Iraq’s State Organization for Marketing of Oil (SOMO) announced on Tuesday that Iraq exported more than 106 million barrels of crude oil in March 2025, reflecting the country’s continued reliance on oil as its main source of revenue. According to SOMO's data, total crude exports reached 106,663,211 barrels, with the vast majority — 104,740,398 barrels — originating from oil fields in central and southern Iraq. Exports from the Gayara oil field in Nineveh totaled 1,613,840 barrels, while crude transported from Kirkuk to Jordan accounted for 309,765 barrels. The report underscores Iraq’s ongoing efforts to maintain production levels amid fluctuating global oil prices and growing regional competition, particularly as some OPEC+ members push for stricter production caps. Iraq, the second-largest oil producer in OPEC, depends on crude exports for over 90% of its national budget. While the country has repeatedly committed to OPEC+ production agreements, it often faces pressure to balance compliance with the urgent need for revenue to fund infrastructure, public services, and post-conflict reconstruction. Recent debates within OPEC+ have highlighted tensions between oil-producing nations over quotas, with Iraq frequently advocating for more flexible output policies

"Iraq amends Budget Law to pay oil firms operating in Kurdistan"

The Iraqi government has revised the national budget law to guarantee payments to international oil companies working in the Kurdistan Region, Deputy Prime Minister for Energy and Oil Minister Hayan Abdul Ghani announced on Wednesday. Speaking at the 9th Sulaimani Forum, Abdul Ghani revealed that negotiations between Baghdad and the Kurdistan Regional Government (KRG) led to the amendment, designed to cover operational costs for energy companies in the semi-autonomous region. “The budget law has been updated specifically to facilitate payments to companies operating in the Kurdistan Region,” Abdul Ghani explained, adding that a formal letter, signed by the Iraqi finance minister, has been issued to ensure these payments. “This move has reassured producers and alleviated their concerns.” Abdul Ghani also pointed out that oil produced in the Kurdistan Region is counted as part of Iraq’s national quota under the Organization of the Petroleum Exporting Countries (OPEC). To comply with OPEC limits, the federal government had to reduce its own production, which has negatively affected Iraq’s overall export capacity. His comments come ahead of a high-level meeting scheduled between Baghdad and Erbil on Saturday to discuss the resumption of oil exports from the Kurdistan Region. Exports through the Iraq-Turkiye pipeline were halted in March 2023 following an international arbitration ruling in Paris, which determined that Turkiye violated a 1973 agreement by allowing the KRG to independently export oil without Baghdad’s approval. The stoppage blocked approximately 450,000 barrels per day of crude, cutting off the KRG’s primary revenue stream. This disruption has strained the Kurdistan Region’s finances, triggered production cuts, and increased reliance on budget transfers from the federal government. Abdul Ghani noted that Prime Minister Mohammed Shia al-Sudani’s recent visit to the Kurdistan Region and his discussions with local officials were instrumental in accelerating the negotiations and facilitating recent agreements.

Iraqi Parliament Approves Halabja as 19th Province

Iraq’s parliament on Monday voted to formally recognize Halabja as the country’s 19th province, ending years of political delays and granting full administrative status to a region long associated with one of the most harrowing atrocities of the Saddam Hussein era. The measure passed with broad backing from Kurdish, Shiite, and Sunni parties during a session of the Council of Representatives attended by 178 lawmakers. The long-delayed legislation was the first item on Monday’s six-point agenda. Second Deputy Speaker Shakhawan Abdullah said the decision carried both legal and symbolic weight. “What happened today is a legal and moral obligation,” he told reporters following the session. “Everyone knows that the fall of the tyrant began with the use of weapons of mass destruction in Halabja.” On March 16, 1988, an estimated 5,000 people, mostly civilians, were killed in a chemical weapons attack on Halabja, with thousands more injured or displaced. The attack remains one of the most notorious crimes committed by the former Baathist regime and a lasting symbol of Kurdish suffering. Efforts to grant Halabja full provincial status date back to 2013, when the Council of Ministers first endorsed the move. The Kurdistan Regional Government unilaterally declared Halabja its fourth province in 2014, and the Interior Ministry recognized the decision in 2018. However, federal ratification had remained elusive amid political disputes between Baghdad and Erbil. “This is the least that can be done for what Halabja has endured,” Abdullah said, while thanking those who supported the bill and criticizing the absence of certain lawmakers. “Their absence was regrettable.” The new province will include the district of Halabja and the towns of Khurmal, Byara, Sirwan, and Bamo. It shares an 18-kilometer border with Iran, including official crossings at Shushmi-Tawela and Pshta.

Iraqi Oil Minister: Kurdistan Region sells 286,000 barrels of oil per day without our knowledge

Iraqi oil minister says the Kurdistan Region produces 286,000 barrels of oil per day and Iran has forged Iraqi documents to avoid US sanctions. Iraqi oil minister Hayan Abdul Ghani said in an interview on Iraqi television that he told OPEC that the Kurdistan Region currently produces 286,000 barrels of oil per day and stressed that the oil production is not under the control of his ministry. He added that according to the budget law, $16 per barrel of oil production has been allocated to the Kurdistan Region, and the amount of oil exported through the port is expected to reach 350,000 barrels per day. The Iraqi oil minister said: that Iraq currently exports 3.2 million to 3.5 million barrels of oil per day, but Iran has forged Iraqi documents to avoid US sanctions.

Final kink obstructs reopening of Iraq-Turkey pipeline

By William Sellars / AGBI Iraq’s oil pipeline through Turkey – which has been closed for two years – is not just a pipeline. It raises a cornucopia of issues: declining Russian oil exports to Turkey, US pressure on Iraq to stop illicit Iraqi oil exports to Iran, peace with the militant Kurdistan Workers Party (PKK) in eastern Turkey, how to split oil revenue between the Iraqi central government in Baghdad and the autonomous Kurdish region, and, finally, how to settle $1 billion dollars in arrears. Resolution may be drawing closer but the last mile, or two, may be the hardest as the oil companies and the Kurdistan Regional Government (KRG) struggle over financial claims. Iraq’s oil ministry said on February 22 that it could begin exports through the pipeline – running from Kirkuk in Kurdistan to the port of Yumurtalık in the Turkish seaside district of Ceyhan – “within two days”. A month later that has not happened. In part, that is because the Association of the Petroleum Industry of Kurdistan (Apikur) – which represents international operators drilling for oil under production-sharing agreements with the KRG – says there is as yet no agreement allowing for the resumption of exports via this pipeline. Apikur members are owed nearly $1 billion in arrears, the association said last year. “Discussions between the government of Iraq, KRG and IOCs [international oil companies] are ongoing,” Myles B Caggins, Apikur spokesman, tells AGBI by email. “We anticipate the US government will continue to apply pressure to Baghdad to ensure all sides reach an agreement swiftly.” The US is putting pressure on Iraq to halt clandestine shipments of crude oil to neighbouring Iran – with which the US has been at odds since the 1979 revolution – or else be subject to sanctions. Up to 200,000 barrels per day (bpd) of Iraqi crude, mainly from the Kurdish north, flow to Iran. Apikur members include the UK’s Genel Energy, London-listed Gulf Keystone Petroleum, HKN Energy, which has its headquarters in Dallas, Norway’s DNO and Canada’s ShaMaran Petroleum. Turkey halted shipments of Iraqi oil through the 970km pipeline in March 2023. Then a Paris-based arbitration tribunal ruled in favour of Baghdad in a case launched by the Iraqi government, which claimed Ankara and the KRG had been illegally exporting oil. The International Criminal Court found both the KRG and Turkey at fault. A general view of oil tanks at Turkey’s Mediterranean port of Ceyhan It fined the latter $1.5 billion and authorised the Iraq state oil marketing organisation, Somo, to control exports out of Ceyhan, a ruling that led Turkey to close the pipeline immediately. Ankara rejected any liability to pay compensation to Baghdad, a position it maintains to this day. Earnings from oil exports At its peak the Ceyhan pipeline carried 400,000 bpd of oil from autonomous Kurdistan, along with up to 75,000 bpd from other parts of Iraq fully controlled by the government in Baghdad. The combined total was equivalent to about 0.5 percent of global oil production. Baghdad successfully argued that earnings from oil exports should be paid to the central government, then redistributed to regional authorities. That problem now appears to have been solved. Early in February the government in Baghdad, under prime minister Mohammed Shia Sudani, agreed to raise the “cost recovery” to the KRG authority in Arbil. The amendment now sets what goes from the central government to the KRG to cover transport and production costs to $16 per barrel, up from an earlier proposal of $7.90 per barrel. In the meantime, Apikur says the Iraqi government – which faces an election in October – has lost out on $28 billion of earnings. Ankara too has missed out on transit fees and access to greater volumes of the Iraqi crude. “We are talking about a relationship of interdependence here,” says Büşra Zeynep Özdemir, an energy researcher at Istanbul-based research body Seta Foundation. “Iraqi oil is important for Turkey, just as the Turkish market is also very important for Iraq. Turkey is one of the largest energy-consuming countries in the region as well as acting as an intermediary for Iraqi oil to reach other countries via Yumurtalık.” Military ceasefire Progress towards resolution has also been helped by a ceasefire declaration from the PKK, which has bases in northern Iraq. The pipeline was put out of commission several times as a result of attacks, both by the PKK and the still active Isis – or Daesh – most recently in 2020. A resumption of shipments through the Kirkuk-Ceyhan pipeline has taken on increased importance for Ankara as Turkey comes under pressure to reduce its imports of Russian crude or also face sanctions. Turkey’s leading refiner Tüpraş said in January it was suspending all imports of Russian crude in response to stepped-up threats of US sanctions. Russian oil accounted for more than 60 percent of all Turkish crude imports last year, with Tüpraş estimated to have taken delivery of 225,000 bpd in 2024. With the Russian door possibly closing, the possibility of Iraqi crude imports takes on greater significance for Ankara.