Iraq’s oil minister announced on Friday that the resumption of oil exports from the Kurdistan Region will be officially declared “in the coming hours,” ending a nearly two-year suspension. The exports will be conducted through the State Oil Marketing Organization (SOMO) via Turkey’s Ceyhan port, according to a statement from the Ministry of Oil.

Oil Minister Hayyan Abdul Ghani stated that exports will initially begin at a rate of 185,000 barrels per day and will gradually increase to the level specified in the federal budget. The move marks a significant step toward resolving a long-standing dispute between the federal government of Iraq and the semi-autonomous Kurdistan Region over oil revenue sharing and export rights.

The suspension of exports began in March 2023 after the International Court of Arbitration ruled in favor of Iraq, stating that Turkey had violated a 1973 pipeline agreement by allowing the Kurdistan Region to independently export oil. The halt in exports has resulted in billions of dollars in lost revenue for both the Kurdistan Regional Government (KRG) and international oil companies operating in the region.

Oil producers in the Kurdistan Region have expressed readiness to resume exports but emphasized the need for formal agreements ensuring payment for past and future exports. Myles B. Caggins III, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told Rudaw English on Friday that member companies are prepared to restart operations once payment assurances are secured.

“APIKUR member companies remain prepared to immediately resume exports as soon as formal agreements are reached to provide surety of payment for past and future exports consistent with our existing contractual, legal, and commercial terms. There has not yet been any outreach in this regard to APIKUR member companies,” Caggins said.

The final obstacle to resuming exports was resolved earlier this year when the Iraqi parliament passed an amendment to the federal budget, increasing transportation and production fees paid to oil producers. This development paved the way for negotiations to restart the flow of oil from the Kurdistan Region, which holds significant untapped reserves and has been a key contributor to Iraq’s overall oil output.

The resumption of exports is expected to provide a much-needed economic boost to the Kurdistan Region, which has faced financial challenges due to the suspension. It also signals a potential improvement in relations between Erbil and Baghdad, though challenges remain in ensuring long-term stability and cooperation in Iraq’s oil sector.

As the announcement of the export resumption looms, stakeholders are closely watching for further details on payment mechanisms and the timeline for scaling up production to pre-suspension levels.