Iraq resumes Kurdish oil exports to Turkey after 2½-year halt (oil opening lower Monday)

Iraq resumed oil exports from its semi-autonomous Kurdish region to Turkey on Saturday, restarting flows through the Kirkuk–Ceyhan pipeline for the first time in two and a half years. The agreement between Baghdad, the Kurdistan Regional Government (KRG), and foreign producers allows 180,000–190,000 barrels per day (bpd) to reach Turkey’s Ceyhan port, according to the oil ministry.

The restart comes after U.S. pressure to bring Kurdish crude back to international markets, with volumes eventually expected to rise to around 230,000 bpd. Iraq’s OPEC delegate Mohammed al-Najjar said the country now has room to boost exports thanks to both the Kurdish flows and new projects in Basra, while still staying within its 4.2 million bpd OPEC quota. Officials expect Iraq’s total exports to approach 3.6 million bpd in the coming days.

The pipeline had been shut since March 2023 after an arbitration ruling ordered Turkey to pay Iraq $1.5 billion for unauthorized Kurdish exports. Under the interim plan, the KRG will commit at least 230,000 bpd to Iraq’s state marketer SOMO, while keeping 50,000 bpd for local use. Revenue from sales will be split, with $16 per barrel set aside in escrow to be distributed to producers, and the remainder transferred to SOMO.

Outstanding debts remain a sticking point, with companies owed about $1 billion in arrears, including $300 million to Norway’s DNO. The KRG and producers agreed to meet within 30 days of the restart to establish a repayment mechanism.

Also from the weekend:

• OPEC will likely raise production by at least 137K bpd on Oct 5 – report

The return of Kurdish crude adds 180–190k bpd to global supply, helping offset tightness even as OPEC+ plans to raise output.

This article was written by Eamonn Sheridan at investinglive.com.