Crude will resume moving from northern Iraq to Turkey's Mediterranean port of Ceyhan in the coming hours, Iraq's oil minister Hayyan Abdulghani said on Wednesday.
This would end a more than two-year hiatus during which the medium sour Kirkuk grade has been unavailable.
"We will start receiving the Kurdistan region's oil either today or tomorrow and export it through [Iraqi state-owned oil marketing firm] Somo to the Ceyhan port," Abdulghani said. "If we resume receiving and exporting Kurdistan's oil, other companies will resume operations, and production will increase."
It is unclear when the Kirkuk grade would become available for export. The minister has made similar statements before but exports did not follow, mainly because of political differences between Baghdad, the Kurdistan Regional Government (KRG) and international oil companies (IOCs) operating in the region.
But Iraq's federal government and the KRG reached a deal on oil output in July. It requires the KRG to deliver at least 230,000 b/d of crude to Somo for export, in exchange for $16/bl in cash or in kind. The amount of crude involved will increase at a later stage.
As part of the deal, 50,000 b/d will be allocated to the Kurdistan region for domestic use.
Baghdad acknowledged the Kurdistan region's oil production averaged around 280,000 b/d, but around 200,000 b/d was shut in on 16 July after drone attacks on fields.
For the month of July, Baghdad estimates oil production in the Kurdistan region averaged 100,000 b/d, senior sources at Somo told Argus.
The pipeline to Ceyhan was shut in March 2023 after Ankara lost an international arbitration case and was [ordered to pay around $1.47bn] (https://direct.argusmedia.com/newsandanalysis/article/2437999) to Baghdad over "unauthorised exports" between 2014 and 2018. The pipeline previously transported 400,000-450,000 b/d of crude.
