Iraq, Kurdish Region Sign Accord to Resume Oil Exports

By Staff, Agencies

Iraq's federal government and the Kurdistan autonomous region on Tuesday signed an accord to allow Kurdish oil exports to resume through Turkey after they were halted 10 days earlier.

The deal, signed in Baghdad in the presence of Iraqi Prime Minister Mohamed Shia al-Sudani and Kurdish premier Masrour Barzani, was to be implemented "today,” a Kurdish regional government official told AFP. It was described as temporary but signals the end of independent oil exports by northern Iraq's Kurdish regional government, and marks a clear limit to its autonomy.

The agreement came two days after Iraq, Saudi Arabia, and several other major oil exporters announced a sharp reduction in their production from May that sent up global energy prices. Barzani said on Twitter that the deal was "temporary" until Iraq's parliament agreed to a new oil and gas law, but he called it "a crucial step towards ending the long-standing dispute" between Erbil and Baghdad.

Turkey stopped handling Iraqi Kurdish oil last month after an international tribunal ruled in a nine-year-old dispute that Baghdad was right to insist on overseeing all Iraqi oil exports.

Oil exports are the key revenue source for both the federal and regional governments, and their management has long been a sensitive topic in relations.

The government of war-scarred Iraq is betting on earning around $70 per barrel in its budget calculations for the next three years, while indignantly watching the autonomous region go it alone by exporting its oil via Turkey. In the eyes of the Kurdistan government, Baghdad was trying to profit from the region's resources while dragging its feet on paying the salaries of Kurdish civil servants and other funds for its regional public sector.