Hopes for a resolution to the long-standing impasse over northern oil exports from Iraq have been revived, as the country’s Oil Minister, Hayan Abdel-Ghani, revealed that recent talks with officials from the Kurdistan region and representatives of international energy companies operating there have yielded positive progress.
During an interview with state-owned Iraqiya TV on Sunday, Abdel-Ghani expressed optimism, stating, “We have made progress in today’s talks, and we expect to reach an understanding in a few days.” The minister’s remarks come after a meeting held in Baghdad, attended by officials from Iraq’s oil ministry and the Kurdistan region’s ministry of natural resources.
The Iraq-Turkey oil pipeline, which once played a crucial role in handling approximately 0.5% of global oil supplies, has been in a state of limbo for over a year due to its closure. Legal and financial obstacles have impeded the resumption of flows from the region, prompting the Iraqi oil ministry to call for a meeting last month with Kurdish authorities and international energy companies to discuss restarting the exports.
A senior oil ministry official, speaking on condition of anonymity due to the sensitivity of the talks, commented, “The meeting is still ongoing to discuss issues that prevent the resumption of oil exports. While it’s still too early to say if a final deal is possible, we can say that the talks have positive aspects.”
The discussions are expected to focus on the Kurdistan Regional Government’s (KRG) production-sharing energy contracts, which Baghdad seeks to amend, as well as the oil production costs claimed by foreign oil companies for the oil produced in the Kurdistan region.
Iraq had previously blamed foreign companies, alongside the Iraqi Kurdish authorities, for the delay in restarting crude exports, citing their failure to submit their contracts to the federal oil ministry for revisions. However, it remains uncertain whether the Kurdish delegates and the foreign firms have agreed to provide their contracts to the oil ministry during Sunday’s meeting.
The revival of the Iraq-Turkey pipeline could have significant implications for the global oil market, as it would restore a crucial supply route that was once responsible for a substantial portion of the world’s oil supply. Resolving the longstanding dispute would not only benefit Iraq’s oil exports but also strengthen the country’s relations with the Kurdistan region and international energy companies operating in the area.
As the talks continue, industry observers and stakeholders alike will be closely monitoring the developments, hoping for a breakthrough that could pave the way for the resumption of oil flows through the strategically important pipeline.