Iraq’s Prime Minister Blames Oil Firms for Kurdistan’s Crude Export Impasse

Charles Kennedy - May 20, 2024

• Talks to restart oil exports from Kurdistan are on hold due to a disagreement over oil contracts.
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• Oil companies operating in Kurdistan refuse to amend their contracts with the region.
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• Iraq blames oil companies for the impasse, while Kurdistan previously blamed Baghdad.

Oil companies operating in Kurdistan refuse to amend their contracts with the semi-autonomous region of OPEC’s second-largest producer Iraq, which has led to an impasse in the talks about resuming oil exports from Kurdistan, the Prime Minister of Iraq, Mohammed Shia Al-Sudani, said this weekend.

“The companies refuse to amend, so the process stops at this point,” Al-Sudani said in a televised press conference on Sunday, as carried by Bloomberg.

Crude oil exports from Kurdistan have now been halted for more than a year, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports.

The impasse followed an International Chamber of Commerce ruling in March 2023 in a dispute between Turkey and Iraq regarding Kurdistan oil. The ICC ruled in favor of Iraq, which had argued that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq.

With the talks with companies now halted, Al-Sudani didn’t say when these could resume.

Earlier this year, Iraq’s Oil Ministry said that foreign oil firms in Iraqi Kurdistan are partially to blame for the delays to the resumption of exports from the semi-autonomous region of OPEC’s second-largest producer.

In November 2023, Norwegian firm DNO, one of the six members of the Association of the Petroleum Industry of Kurdistan (APIKUR), said that the international oil companies operating in Kurdistan would not be producing oil for exports until they have clarity about overdue and future payments and sales terms.

In January this year, the foreign companies called on U.S. Congress for immediate action to help resolve halted crude oil exports from Kurdistan. APIKUR has written a letter to Congress in which it said “The export of oil is the foundation of Iraq’s economy, and all Iraqis will benefit when full production and global sales resume from the Kurdistan Region.”

By Charles Kennedy for Oilprice.com