Economically boosting the KRG with resumed oil exports will benefit region

Oil is flowing again from Iraq’s Kurdistan Region to Turkey, a move hailed as “historic” and expected to boost Iraq’s federal budget by up to $500 million monthly.

The autonomous Kurdistan Region of Iraq has re-opened the oil spigot after years of turmoil with Baghdad prevented oil exports.

Rudaw media in Erbil, the capital of the Kurdistan Regional Government in northern Iraq, said that oil exports had resumed on Saturday.

KRG Prime Minister Masrour Barzani called the resumption of the flow was “historic.”

The exports had been suspended in 2023, with the resumption meaning that the oil can now flow to Turkey via a pipeline.

“The operations commenced at 6 a.m. at a high pace and complete flow without recording any technical problems worth mentioning, reflecting the success of the joint efforts between the federal government and the regional government in achieving this important accomplishment,” Iraq’s oil ministry said in a statement.

The route to this resumption has been complicated.

During the war on ISIS after the terrorist group took over a swath of Iraq in 2014, oil flow from the Kurdistan region to Turkey when Erbil was largely cut off from Baghdad. In those days ISIS controlled Mosul and many Sunni cities. It also threatened Kirkuk, which sits on the road between Erbil and Baghdad.

As such, the KRG had to fend for itself. Exporting oil to Turkey helped the KRG. Turkey also invested heavily in the Kurdistan region. Cash flowed into Dohuk and Erbil as Turkish companies moved in. Turkey had also played a key role in Erbil’s airport reconstruction. It made sense for Turkey to help transit the oil.

However, a Paris arbitration subsequently “found that Ankara had violated a 1973 pipeline agreement with Baghdad by allowing Erbil to independently export oil since 2014,” Rudaw noted. This came after Baghdad clashed with Erbil over an independence referendum in 2017. Baghdad was trying to weaken Erbil’s autonomy.

Now the oil is flowing again, marking a step towards managing Iraq’s national wealth, as Baghdad sees it.

For Turkey it’s also important. “Turkish Energy Minister Alparslan Bayraktar confirmed the flow of the Kurdish oil to his country at 7:07 am, Saturday” Rudaw reported.

“Mazhar Mohammed Saleh, an advisor to the Iraqi Prime Minister Mohammed Shia’ al-Sudani for financial and economic affairs, told Rudaw on Saturday that the resumption of oil exports from the Kurdistan Region would contribute approximately 400-500 million dollars monthly to the country federal budget.”

The US has also backed the resumption of oil exports and the recent deal to see it flow. The KRG authorities have sought to work with the Trump administration. In May, the KRG noted “on Monday, May 19, 2025, KRG Prime Minister Masrour Barzani presided over a high-level ceremony at the United States Chamber of Commerce in Washington, where two major energy agreements were signed to expand the Kurdistan Region’s energy infrastructure and unlock long-term investment opportunities across both the Kurdistan Region and Iraq.”

Eight oil companies, representing around 90 percent of production in the KRG, have signed on to the new deal, Reuters said.

Kurdistan24, a local media station noted that “US Secretary of Energy Chris Wright on Tuesday hailed the Kurdistan Region’s vast oil and gas reserves as an opportunity for mutual prosperity, describing Prime Minister Masrour Barzani’s landmark energy agreement with American companies as a strategic step forward in strengthening economic ties between Erbil and Washington.”

According to Iraq’s Minister of Oil Hayyan Abdul Ghani, KRG will send 190,000 barrels a day to the Iraqi national oil marketing organization SOMO. This appears to be the amount per day that will travel to Turkey and be marketed.

It is expected to grow to some 220,000 barrels per day. Some 50,000 barrels will remain for local use.

France and Britain have both welcomed the new oil deal.

This complex process took many months but the ability for the Kurdish authorities to turn on the oil tap is a significant achievement. It will strengthen the KRG and help put it back on a good financial footing.

The KRG hosts US and other coalition forces and is a key strategic partner. Having it be economically powerful is also important for the region.