Iraq plans to begin pumping crude from its northern Kirkuk fields to Turkey's Ceyhan port through a long-closed pipeline that will allow it to do so independently of the Kurdistan Regional Government (KRG), oil minister Hayyan Abdulghani said today.
The route, which has been closed by damage since 2014, could initially carry 200,000-250,000 b/d, Abdulghani said. He said final inspections on the rehabilitated pipeline segment are expected to be completed within about a week.
Tensions have escalated between Baghdad and Erbil about stalled exports, just as federal Iraq's 3.4mn b/d of southern exports have been stopped by the US-Israel-Iran war. Iraq relies heavily on oil revenues to fund government spending, meaning a prolonged shutdown of exports could place severe strain on state finances and economic and political stability.
Baghdad has cut crude production to 1.5mn-1.6mn b/d to prioritise domestic refining and electricity generation, Abdulghani said. Argus estimates production at around 1.2mn b/d.
Iraq was expected to produce 4.273mn b/d under its Opec+ quota in March, meaning it has shut in around 3mn b/d. Operations have been halted at fields including the 470,000 b/d West Qurna-1, the 480,000 b/d West Qurna-2, the 240,000 b/d Majnoon, the 400,000 b/d Halfaya and the 300,000 b/d Buzurgan, and output continues at limited levels in other areas to support domestic needs, Abdulghani said.
The attempt to restart northern exports comes as a dispute between Baghdad and the Kurdistan Regional Government (KRG) intensifies over the use of the pipeline that crosses the Kurdistan region to Turkey. The pipeline, to Ceyhan, is currently shut, and has been only intermittently operating at far below its 900,000 b/d capacity.
Iraq's oil ministry said on 15 March it had repeatedly asked Erbil to allow the resumption of exports from federal fields at up to 300,000 b/d. The KRG has also previously exported around 200,000 b/d.
The ministry said the KRG refused to restart exports and attached conditions unrelated to the oil flows. The KRG's ministry of natural resources (MNR) rejected this, saying Baghdad was attempting to shift blame. The MNR said production in Kurdistan had already been halted following repeated missile and drone attacks on energy infrastructure carried out by militia groups.
The KRG also accused Baghdad of imposing what it described as a "suffocating economic blockade" on the region through restrictions on dollar access and trade flows. KRG leader Masoud Barzani called on both governments to meet and resolve their differences, warning Iraq faces multiple crises as the regional war continues.
"Opportunists seeking to deepen divisions must be stopped," Barzani said on 16 March.
Earlier proposals from Erbil suggested a broader political settlement linking customs systems, dollar access for local traders and the resumption of oil exports through the Ceyhan pipeline.
Even if Iraq's exports resume through Ceyhan, they would represent only a fraction of its normal capacity.
