The Kurdistan Regional Government (KRG) anticipates resuming oil exports early next year, according to Kamal Mohammed, the acting Minister of Natural Resources. The first phase will set the cost of extraction and transportation at $16 per barrel.

Speaking on Tuesday, Mohammed highlighted the significant financial losses caused by the export suspension, estimating the Iraqi treasury's loss at over $1 billion monthly since March 2023, amounting to $20 billion to date. The suspension followed an International Court of Arbitration ruling that deemed the exports through Turkey's Ceyhan port illegal.

“The halt has been detrimental to both the Kurdistan Region and Iraq as a whole,” Mohammed stated.

Budget Law Dispute Resolved

The prolonged suspension was partly due to disagreements over the Iraqi budget law. A clause had previously set the cost of extracting and transporting Kurdistan’s oil at $6 per barrel, which Mohammed described as “unrealistic.”

“After extensive negotiations, the parties agreed to amend the budget law, increasing the cost to $20.6 per barrel. Of this, $16 will be allocated to international companies in the first phase,” Mohammed explained.

An impartial international consulting firm will audit these costs over a 60-day period after the law's amendment. Mohammed expressed confidence that Iraq’s parliament would approve the adjustment by the end of the year.

Export Plans via Turkey

Once resumed, oil will flow through the Ceyhan Oil Pipeline. While Iraq possesses other pipelines to Jordan and Syria, neither is operational, making Turkey the primary export route.

“Preparations are underway, and with the political agreements in place, we expect exports to restart early next year,” Mohammed said.

The acting minister's optimism follows renewed collaboration between the KRG and Iraq's federal government to resolve their longstanding disputes, aiming to stabilize the oil sector and bolster revenue streams for both entities.