Iraq Says Kurdistan Refuses to Resume Oil Exports Through Turkey Amid Regional Crisis

Peregraf - Iraq's federal oil ministry said on Sunday that authorities in the Kurdistan Region had refused to resume crude exports through the northern pipeline to Turkey, despite Baghdad's request to restart shipments to offset losses caused by disruptions to southern exports amid escalating regional tensions.

In a statement responding to inquiries from media outlets, lawmakers, and energy sector stakeholders, the Iraqi Ministry of Oil said it had been in continuous contact with the Kurdistan Regional Government's Ministry of Natural Resources since the start of the current regional crisis.

According to the ministry, Baghdad had expressed readiness to resume exports through the pipeline running from the Kurdistan Region to the Turkish Mediterranean port of Ceyhan, proposing shipments of up to 300,000 barrels per day.

That volume, the ministry said, would be in addition to at least 200,000 barrels per day previously exported from oil fields in the Kurdistan Region before the current disruptions. The pipeline's overall export capacity is estimated at roughly 900,000 barrels per day.

However, the ministry said Kurdish authorities had declined to restart exports for now, attaching conditions that Baghdad described as unrelated to the immediate issue of crude shipments.

"The Ministry of Natural Resources confirmed its refusal to resume exports at this time and set several conditions not related to the crude oil export process," the statement said.

Officials in Baghdad said those issues could be addressed later, in parallel with the resumption of exports, arguing that further delays would deprive Iraq of urgently needed revenue at a time when the country's main export route is under pressure.

Oil exports from southern terminals — which normally account for the vast majority of Iraq's shipments — have been disrupted amid the widening regional conflict and security concerns affecting shipping through the Strait of Hormuz.

The Iraqi oil ministry said restarting the northern export route could help partially compensate for those losses. Baghdad renewed its appeal to Kurdish authorities to reconsider their position and immediately resume exports through the pipeline to Turkey.

The ministry said the request was based on "the supreme national interest" and called for cooperation in line with the Iraqi Constitution and the country's federal budget law.

The dispute underscores longstanding tensions between the federal government in Baghdad and the Kurdistan Regional Government over control of oil resources, export authority, and revenue sharing — issues that have repeatedly disrupted production and exports in northern Iraq.

Mounting Financial Pressure

The economic stakes could become more severe if disruptions to southern exports continue. Mudher Muhammad Saleh, financial adviser to Prime Minister Mohammed Shia' al-Sudani, warned on Saturday that Iraq may eventually be forced to resort to domestic borrowing if the ongoing U.S.–Israel war on Iran disrupts oil exports through the Strait of Hormuz.

Saleh said the financial impact would not be immediate because Iraqi crude is exported before its final pricing cycle is completed. The consequences, he said, would likely begin to appear after roughly two months.

"There is an impact from the disruption of Iraqi oil exports through the Strait of Hormuz on the overall financial and economic situation in the country, but it does not appear now because oil is exported first and then priced later," Saleh said.

If the crisis persists, he warned, the government may have little choice but to borrow domestically to continue paying public sector salaries, pensions, and foreign financial obligations. Iraq could also be forced into a period of fiscal austerity affecting wages, pensions, and social welfare spending.

Still, Saleh said Iraq currently holds sufficient financial reserves to withstand several months of disruption, adding that coordination between monetary and fiscal authorities could help cushion the impact if the conflict lasts four to five months.

The warning comes as tensions escalate amid the ongoing U.S.–Israel war on Iran, now in its 16th day, which has raised fears that the strategic waterway could become a target in the widening conflict.

Nearly one-fifth of global oil supplies pass through the Strait of Hormuz, making it one of the world's most critical energy chokepoints. For Iraq — whose state budget depends heavily on oil revenue — any prolonged disruption to shipments could place significant strain on government finances in the months ahead.