Iraq’s Oil Minister Hayyan Abdul Ghani stated the country’s hopes to resume crude oil exports from Kurdistan within two days. This announcement comes nearly two years after a halt due to a payment disagreement. The development holds significant implications for regional and global oil markets.
Iraq has been in active discussions with Turkey to resolve technical issues preventing the resumption of oil exports from its northern Kurdistan region. The pipeline, which extends to the Mediterranean port of Ceyhan, has been idle despite efforts to restart shipments.
Minister Ghani expressed optimism at a recent conference in Baghdad, revealing that the approval from Turkey is the final step needed. ‘As soon as Turkish approval arrives, the exports will be resumed,’ he said. ‘We hope in the next two days.’ This statement underscores the urgency and importance placed on reestablishing this channel, which is crucial for both Iraq’s economy and the international oil supply chain.
The backdrop to this potential resumption lies in Iraq’s decision to increase payments to companies operating in Kurdistan, a move approved by the Iraqi parliament. This adjustment is expected to boost production and potentially stabilize the region’s oil industry.
However, the anticipated shipments, estimated at about 185,000 barrels a day, are significantly lower than the volumes transported before the shutdown in March 2023. Despite this, the additional supply is expected to contribute to a global market already wary of potential surpluses.
Iraq has assured compliance with OPEC+ production quotas, even with the addition of oil from the Kurdistan pipeline. This assurance is vital as global oil markets balance production against fluctuating demand.
The resumption of oil exports from Kurdistan is poised to impact both regional economies and the global oil market. Iraq’s commitment to addressing technical and financial challenges reflects its strategic approach to enhance its oil production capabilities while maintaining adherence to international agreements.
