Baghdad, Erbil, companies reach final deal to resume Kurdish oil exports: Sources

ERBIL, Kurdistan Region - Iraqi government, Kurdistan Regional Government (KRG) and oil companies on Monday signed a tripartite agreement to resume Kurdish oil exports, which have been stalled since 2023, well-informed sources told Rudaw English. 

The four-page agreement, which was signed days after an understanding was reached between the three sides, stipulates that companies producing oil in the Kurdistan Region will receive crude oil instead of cash as part of their entitlements. The aim is to ensure the security of their revenues, a source with knowledge of the discussions said. 

Rudaw English has learned that some companies signed the deal online. 

The oil exports will resume days after the agreement, added the source. 

Other sources, speaking on condition of anonymity, cited two main reasons for designating oil as the form of financial entitlement for the companies. First, it provides a guarantee for the firms to secure their payments, as they fear potential delays if entitlements are paid in cash by Baghdad. Second, it helps alleviate pressure on Baghdad, which is reportedly facing cash shortages. Payments in US dollars could lead to further delays, making oil a more practical alternative.

Rudaw understands that the value of oil provided to companies in lieu of their financial entitlements will be calculated based on the oil price at Turkey’s Ceyhan port. 

The latest agreement was first announced by Kurdistan Region Prime Minister Masrour Barzani on Saturday, expressing hope that Baghdad will implement it and that it will help resolve the financial and oil disputes between the two governments.