Iraqi Oil Minister: Kurdistan Region Begins Handover of Oil to SOMO for Export Through Turkey

Peregraf

Iraq’s Oil Minister Hayan Abdul Ghani, announced that the process of transferring oil from the Kurdistan Region to the Iraqi Oil Marketing Company (SOMO) has officially begun. This step is expected to facilitate the long-awaited resumption of oil exports through Turkey’s Ceyhan port.

The minister confirmed that discussions are also underway regarding financial debts owed to the Kurdistan Regional Government (KRG). “The debts owed to the Kurdistan Region will be agreed upon,” he stated, without providing further details on the timeline or terms of the agreement.

The development marks a significant step in resolving the ongoing dispute between Baghdad and Erbil over oil revenues and exports. Oil exports from the Kurdistan Region have been halted since March 2023, when Turkey stopped the flow through the Ceyhan pipeline following an international arbitration ruling in favor of Iraq.

While no official date for the resumption of exports has been announced, the initiation of oil transfers to SOMO signals progress in negotiations between the federal and regional governments.

On February 2, 2025, the Iraqi parliament approved an amendment aimed at facilitating the restart of oil exports from the Kurdistan Region. Kurdish MP Dilan Ghafoor told Peregraf that the amendment, submitted by the Iraqi government, sets the cost of production and transportation of Kurdistan’s oil at $16 per barrel, which will be covered by the Iraqi Ministry of Finance.

The KRG and oil companies have welcomed the allocation, seeing it as a key step toward resuming exports. However, the $16 per barrel rate is a temporary measure. Within 60 days, an independent assessment will be conducted by a specialist company appointed by mutual agreement between the KRG and the Iraqi federal government to determine the actual production and transportation costs of Kurdistan’s oil fields.

Observers believe resolving financial and logistical challenges swiftly is crucial, as both Baghdad and Erbil rely heavily on oil revenues. The Kurdistan Region has been facing a severe financial crisis due to the halt in oil sales, affecting its ability to pay salaries and sustain public services.

The international market is closely watching developments, as Iraq—one of OPEC’s largest producers—seeks to restore its full export capacity amid fluctuating global oil prices.