Turkey had stopped extracting oil from the Kurdish region to its Ceyhan port after Iraq won an arbitration case.
Iraq’s federal government and the Kurdistan Regional Government (KRG) have reached an initial agreement to resume northern oil exports this week, a KRG spokesman has said.
“Following several meetings between the KRG and federal government, an initial agreement has been reached to resume oil exports jointly through Ceyhan [in Turkey] this week,” Lawk Ghafuri, head of foreign media affairs for the KRG, wrote in a Twitter post.
“This agreement will remain in effect until the oil and gas law bill is approved by Iraqi Parliament,” Ghafuri said.
Following several meetings between the Kurdistan Regional Government & Federal Government, an initial agreement has been reached to resume oil exports through Ceyhan this week. This agreement will remain in effect until the oil & gas law bill is approved by Iraqi Parliament.
— Lawk Ghafuri (@LawkGhafuri) April 2, 2023
The export of oil was halted on March 25 after a Paris-based arbitration court ruled that Turkey had violated a 1973 agreement with Iraq by exporting the resource from the semi-autonomous Kurdish region without Baghdad’s consent between 2014 and 2018.
The oil was exported via pipeline from the Kurdish Fish-Khabur border to the Turkish port of Ceyhan.
Several companies suspended operations or began storing their output last week following the court’s decision, including Norwegian oil and gas operator DNO and Canada-based Forza Petroleum.
United States-based HKN Energy said in a statement last week that it was going to shut down its “operations within a week if no resolution is reached”.
Overall, the court’s ruling had caused the stoppage of about 450,000 barrels per day (bpd) – about 0.5 percent of the global oil supply. Still, the move had an impact on oil prices, which were back to nearly $80, according to Reuters.
The resumption of pipeline flows from the KRG will still need approval from Turkey.
“A letter of request to resume oil flows will be sent by Baghdad to Ankara,” a KRG official told Reuters.
Sources last week told Reuters that Turkey wants a second case tied to the 1973 agreement settled with Iraq before the pipeline reopens.
Oil exports have been a thorny issue for Iraq and its semi-autonomous region.
Tensions heightened in February last year after the Iraqi Supreme Court made a landmark decision by ruling that a 2007 oil and gas law regulating the KRG’s oil industry was unconstitutional.
Mohammed Shia al-Sudani, who became Iraq’s prime minister in October last year, has been working to quell tensions since taking office.
Al Jazeera and news agencies