Iraq's oil minister: We will sign an agreement regarding oil exports via the Ceyhan pipeline

Iraq’s oil minister has confirmed progress toward finalizing an agreement to resume oil exports from the Kurdish region to Turkey via the Kirkuk-Ceyhan pipeline, a critical step in addressing disruptions to Iraq’s energy sector. Under the proposed arrangement, the state-owned Oil Marketing Company of Iraq (SOMO) will oversee exports of crude from Kurdish fields, with shipments initially targeting 230,000 barrels per day (bpd) and potentially scaling to 600,000 bpd at full capacity according to reports(https://www.rudaw.net/english/middleeast/iraq/110320263). The agreement follows a U.S.-brokered deal in September 2025 that temporarily resolved a two-year standoff between Baghdad and the Kurdistan Regional Government (KRG) over unauthorized exports and revenue-sharing disputes as detailed in a U.S. research report.

The pipeline, which had been idle since March 2023 due to a $1.5 billion arbitration ruling against Turkey for unapproved Kurdish exports, is now operational pending technical and logistical coordination between federal and regional authorities according to Reuters(https://www.rudaw.net/english/middleeast/iraq/110320263). Iraq’s oil ministry emphasized that the KRG must provide security guarantees for oil infrastructure and resolve access to U.S. dollars for Kurdish traders, a condition tied to the KRG’s reliance on black-market currency rates according to Kurdish sources. Meanwhile, eight international oil companies operating in the region—representing over 90% of production—have aligned with the federal and regional governments to facilitate the resumption of exports as reported by Reuters.

The move aims to mitigate revenue losses from southern oilfield production declines, which fell to 1.3 million bpd in March 2026 due to Gulf export disruptions linked to regional conflicts according to energy reports. Analysts note that the pipeline’s restart could stabilize Iraq’s fiscal outlook, as oil exports account for nearly all federal budget revenue. However, challenges remain, including potential renegotiations of the 1973 Iraq-Turkey pipeline treaty and political tensions ahead of Iraq’s November parliamentary elections as detailed in U.S. research. The KRG has also signaled readiness to export Kurdish-produced oil independently if federal conditions are not met, underscoring ongoing sovereignty debates according to Kurdish media.

This development highlights the interplay of geopolitical diplomacy, energy infrastructure, and fiscal strategy in Iraq’s efforts to secure stable export routes amid volatile regional dynamics.