Kurdistan has not exported any oil this month. Tensions in the Hormuz Strait due to the Iran conflict have created major obstacles for Iraq’s oil trade. Baghdad wants to use Kurdistan’s pipelines to export Kirkuk oil, but Erbil has set strict conditions.
The main issue revolves around exporting oil from Kurdistan to Turkey’s Ceyhan ports. The closure of the Hormuz Strait has limited Iraq’s options. Currently, Kurdistan cannot ship any crude oil abroad.
The Kurdistan Regional Government insists that customs and tax issues with Baghdad be resolved. They also demand that the state guarantee dollar payments to local traders. So far, Baghdad has not fully agreed to these conditions.
Haian Abdulghani, Iraq’s oil minister, said discussions with Erbil are ongoing. Both sides are actively exploring safe ways to reopen pipelines and reach a formal agreement soon.
A senior Iraqi official warned that if Erbil and Baghdad fail to reach a deal, salaries and other payments could be affected. The official said delays might force Baghdad to find alternative solutions to distribute funds.
Kurdistan can potentially export up to 700,000 barrels per day. Before the conflict, the region exported 250,000 barrels daily. This means Iraq could sell 450,000 barrels daily through Kurdistan’s pipelines, increasing national revenue significantly.
The Hormuz Strait closure has caused the largest economic shock in Iraq’s recent history, severely affecting trade, revenue, and regional markets. Most of Iraq’s oil previously shipped through that route is now blocked.
Officials say that if the Kurdistan pipeline had been operational since February 28, Iraq could have already earned over $650 million. The ongoing dispute highlights how critical Kurdistan’s oil is for Iraq’s economy.
Reopening the pipeline will require cooperation between Erbil and Baghdad. Both governments are under pressure to find a solution quickly to resume exports and stabilize Iraq’s oil revenue.
