Baghdad calls KRG, IOCs for meeting over oil exports

Iraq's oil ministry has called for a meeting with Iraqi Kurdistan ministry of natural resources (MNR) and the international oil companies operating in the Kurdish region "as soon as possible", to reach a deal on resuming north Iraq crude exports via Turkey's Mediterranean Ceyhan port.

"The ministry of oil called… a meeting in Baghdad as soon as possible for the purpose of… reaching an agreement to accelerate the restart of production and resume the export of oil through the Turkish port of Ceyhan and according to the quantities specified in the budget law," Iraq's ministry of oil said.

Northern Iraqi crude exports averaging around 470,000 b/d from Iraq's semi-autonomous Kurdistan region have been absent from the market since March 2023 when an international arbitration ruling said Turkey had breached a bilateral agreement with Baghdad by allowing Iraqi Kurdish crude to be exported without the federal government's consent.

"We acknowledge the swift, public response from Iraq's Ministry of Oil and look forward to scheduling joint discussions to restore oil exports through the Iraq-Türkiye pipeline," the Association of the Petroleum Industry of Kurdistan (Apikur) said today.

Apikur called on 27 May for a tripartite meeting between the association, the MNR and the oil ministry to discuss oil exports. It was responding to Iraqi media reports blaming it for the stalling of the talks, saying that no joint discussions between IOCs and representatives of the [Kurdistan Regional Government] KRG and the [government of Iraq] GoI have occurred since the start of January.

"We definitely believe that GoI seems more serious about resolving the issues after PM [Mohammed Shia] al-Sudani's visit to US," a source previously told Argus.

Compliance struggles

Iraq's federal government is finding it difficult to strike a balance between repairing its rift with the KRG in Erbil and complying with its Opec+ quota commitments. It recently submitted a plan to Opec outlining how it will compensate for producing above quota in the first quarter.

Opec and the wider Opec+ group are holding their next ministerial meetings on 2 June, to discuss the 2.2mn b/d voluntary production cuts that eight countries, led by Saudi Arabia and Russia, began implementing from the start of the year, and which are due to expire at the end of June.

The meetings were due to take place in person, in Vienna. But an announcement last week that the meetings would be moved online could suggested that the group does not plan to take any radical action.

Iraq's struggles with compliance will likely continue with the spectre of returning Kurdish crude looming large over Baghdad.

By Bachar Halabi