ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) on Wednesday instructed its natural resource ministry to coordinate with oil companies and relevant bodies in Iraq to restart Kurdish oil exports “as soon as possible.” In a meeting held by the KRG’s Council of Ministers the ministry was instructed “to maintain constant contact with the Iraqi oil ministry, [Iraq’s State Oil Marketing Organization] SOMO, and oil producing companies in the Kurdistan Region to resume oil exports by SOMO.” The directive comes after Iraq’s parliament on Sunday approved an amendment to the federal budget law, which increases compensation for international oil companies (IOCs) operating in the Kurdistan Region. The amendment raised oil production and transportation costs to $16 per barrel, a substantial increase from the $6.90 set in the federal budget that was passed in June 2023. Members of the KRG delegation, who were in Baghdad to discuss the amendments to the 2025 federal budget law and the obstacles to paying the Kurdistan Region’s civil servant salaries, attended Wednesday’s meeting and presented a report on their agreements with the Iraqi finance ministry. The KRG’s Council of Ministers approved the delegation’s recommendations “to guarantee the [provision of] salaries of all twelve months of 2025 and eliminate any technical excuses to prevent the implementation of the agreement.” Of note, the Iraqi government had proposed the amendment to the three-year federal budget law in November, but lawmakers only passed the bill on Sunday following months of discussions. Moreover, the KRG had previously refused to hand over its oil to Iraq’s SOMO before the halt of its oil exports. The new federal budget law amendment is seen as a key factor in resuming Kurdish oil exports, which have been suspended since March 2023, following a ruling by a Paris-based arbitration court that favored Baghdad against Ankara. The decision noted that the latter had violated a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014. The suspension halted the export of approximately 400,000 barrels of Kurdish oil daily, along with some 75,000 barrels from Kirkuk. On Monday, Iraq's Oil Minister Hayan Abdul Ghani informed state media that cooperation was underway with the KRG to begin transferring the Kurdish oil to SOMO. On the same day, Myles Caggins, the spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR) welcomed the Iraqi parliament’s amendment to the budget law. The KRG has struggled to pay the salaries of its civil servants on time and in full for a decade due to a financial crisis that was exacerbated by the halt of Kurdish oil exports. Erbil is reliant on its local income and federal budget funds.
