Iraq’s Sudani says Turkish halt of oil exports violates 1973 deal

ERBIL, Kurdistan Region - Iraqi Prime Minister Mohammed Shia’ al-Sudani said that Turkey’s failure to resume exports of Kurdistan Region oil violates a 1973 agreement.

“We are waiting for a signal from Turkey to resume exports, because its halt violates the original agreement between Iraq and Turkey in 1973,” Sudani said at the Middle East Global Summit on Wednesday hosted by Al-Monitor and Semafor in New York this week.

Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline in March after a Paris arbitration court ruled in favor of Baghdad that Ankara had breached a 1973 pipeline agreement when it allowed the Kurdistan Regional Government (KRG) to begin independent oil exports in 2014. The International Chamber of Commerce ordered Turkey to pay $1.4 billion in damages to Baghdad for allowing the KRG to independently export its oil between 2014 and 2018. 

According to Sudani, Turkey has cited “technical issues” for why exports have not resumed after his government reached a deal with the KRG. He said Baghdad is waiting for details regarding the extent of the problem. 

The Iraqi prime minister also said that due to the halt Iraq’s exports are down by around 470,000 barrels per day, “and this number affects the budget revenues.” 

About 400,000 barrels of oil were being exported daily by Erbil through Ankara, in addition to some 75,000 barrels from Kirkuk’s fields. 

In July, Turkish President Recep Tayyip Erdogan said in a press conference that the suspension of the Kurdistan Region’s oil exports was a result of problems between the federal government and the KRG and that Ankara had no issues with receiving the oil. Days later, Iraq’s oil ministry responded that Erbil and Baghdad are on the same page regarding the resumption of exports. 

The KRG is heavily reliant on oil revenues and an inability to sell its crude has severely impacted its economy. Erbil has lost billions of dollars since March. 

Under Iraq’s 2023 budget, the KRG is obliged to sell 400,000 barrels of crude oil through Iraq’s national oil marketing body and if the export suspension continues, Iraq will take Kurdish oil for its internal use.