Northern Iraq crude exports to resume today

Crude exports from northern Iraq via Turkey will resume today after a deal was signed between the semiautonomous Kurdistan Regional Government (KRG) and the federal government in Baghdad.

"Oil exports to resume today," the KRG's head of foreign media affairs Lawk Ghafuri said.

But the deal "is temporary," KRG prime minister Masrour Barzani said at the signing ceremony, which was attended also by his Iraqi counterpart Mohammed Shia al-Sudani. It will remain in effect until Baghdad's oil and gas bill is approved by parliament. This could be in the coming weeks.

Around 400,000 b/d of northern Iraqi Kurdish crude has been kept from reaching international markets since 25 March, after Turkey closed the export pipeline that transports it to the Mediterranean port of Ceyhan — the only viable outlet through which the KRG can export its crude. Ankara's move followed a ruling by the Paris-based International Chamber of Commerce's court of arbitration, which said Turkey had breached a 1973 bilateral agreement with Iraq by allowing crude marketed by the KRG to be exported without Baghdad's consent.

With the deal concluded, Turkey now will facilitate the resumption of pipeline flows to Ceyhan.

The deal stipulates that crude from the Kurdistan region will now be jointly exported by the KRG's natural resources ministry and Iraq's federal oil marketing firm Somo, according to sources. An account will be set up at the Iraqi Central Bank for oil revenues under the KRG's management, which Iraq's federal government will have monitoring access.

The resumption of crude exports comes on the heels of a unflagged decision by eight members of the Opec+ coalition, including Iraq, to collectively cut 1.16mn b/d from their oil production from May until the end of the year. That has increased June Ice Brent prices by around $5/bl to around $85/bl.

By Bachar Halabi