Kurdistan oil exports have climbed above 200,000 barrels per day, marking a vital economic recovery after more than two years of shutdown. This achievement signals progress in energy ties between Erbil and Baghdad. However, a growing dispute over delayed payments now threatens the fragile balance of this new cooperation.
Additionally, the Kurdistan oil exports currently reach around 205,000 barrels per day. The Kurdistan Region moves crude through the Kirkuk-Ceyhan pipeline to Turkey’s Ceyhan port. Since resuming operations, buyers have bought about four million barrels.
Yet optimism is fading. Baghdad has failed to meet its financial obligations to international oil companies (IOCs). These firms are crucial to maintaining and expanding the region’s output. The Kurdistan oil exports deal was based on a tripartite agreement among the Kurdistan Regional Government (KRG), Iraq’s Oil Ministry, and the IOCs. Baghdad’s failure to pay risks collapsing this hard-won arrangement.
The exports resumed on Sept. 27, 2025, ending a 30-month paralysis that crippled the Kurdistan Region’s economy. Initial flows began at 190,000 barrels per day before gradually increasing. The new agreement resolved part of the long-running dispute that started in 2023, when Turkey halted exports following an international court ruling favoring Baghdad.
Under the new framework, Iraq’s State Organization for Marketing of Oil (SOMO) now handles all official sales. However, the KRG ensures oversight by placing its own representative at Ceyhan port during marketing and loading. This transparency measure helped build trust between the two governments.
Financially, all proceeds from Kurdistan oil exports are now sent directly to Baghdad’s treasury. This change marked a major shift from past independent sales and aimed to integrate Iraq’s energy revenue system.
But cracks are showing. Baghdad has not released payments owed to the IOCs, violating a key term of the deal. Without these funds, companies cannot cover costs or sustain production. The delay revives mistrust between Erbil and Baghdad and risks another disruption in Kurdistan oil exports.
New negotiations are planned after Iraq’s upcoming parliamentary elections. The results will determine whether the next government honors the agreement or returns to old political pressures. A cooperative government could secure stable oil revenue for both sides. A hostile one might trigger another shutdown, damaging Iraq’s broader economy.
The Kurdistan oil exports issue has now become a test of Iraq’s commitment to partnership, federalism, and economic stability. Its outcome will shape the future of energy cooperation between Erbil and Baghdad for years to come.
