ERBIL, Kurdistan Region - An Iraqi oil ministry source said Wednesday that an agreement had been reached to resume exporting Kirkuk oil through the Kurdistan Region’s pipeline to Turkey’s Ceyhan port at up to 600,000 barrels per day, but a Kurdistan Regional Government (KRG) official disputed the claim, citing “non-negotiable” conditions including security guarantees for oil fields and dollar access for the Kurdistan Region.
“The export of Kirkuk oil via the Kurdistan Region to Turkey’s Ceyhan port is resuming. This was not just a request, but an agreement,” Iraq oil ministry spokesperson Sahib Bazoun told Rudaw.
The escalating conflict between the United States and Israel against Iran and the continued closure of the Strait of Hormuz, a strategic maritime chokepoint, have forced Baghdad to explore several export routes. Baghdad has formally requested approval from the Kurdistan Regional Government (KRG) to use the pipeline connecting the Region to the Turkish port of Ceyhan on the Mediterranean.
Bazoun added that due to the regional conflict, it has been decided to form a joint committee between the Iraqi oil ministry and the Kurdistan Region’s ministry of natural resources. The committee is scheduled to make field visits in the coming days to follow up on the technical and logistical aspects of the pipelines.
According to Bazoun, around 230,000 barrels of oil were previously shipped daily to storage facilities in the Kurdistan Region, but under the new agreement, the line will be operated at its full capacity of 600,000 barrels per day, with the possibility of further increases.
A senior KRG official told Rudaw that Baghdad’s announcement is inaccurate, saying no oil will flow through the Iraq-Turkey pipeline until Baghdad “provides security guarantees for oil and gas companies to resume production.”
Several oil and gas companies have halted operations due to fears of aerial attacks. Following two drone strikes on Thursday, production was suspended at Duhok province’s Sarsang field, operated by the US-based HKN Energy. Operations at the strategic Khor Mor gas field in Sulaimani province have also been halted since the onset of the war in late February, as the site has been targeted numerous times in the past.
Iraqi pro-Iran armed groups have claimed responsibility for several attacks on the Kurdistan Region.
The source added that the KRG will be ready to facilitate exports once Baghdad “ends the dollar embargo on the Kurdistan Region.”
Baghdad's new ASYCUDA digital customs system prevents Kurdish traders from accessing official-rate US dollars unless they pay federal taxes in advance through a platform not yet fully integrated with the KRG’s system. This has created what the source described as a “dollar embargo”, forcing the Region to rely on black-market currency that is more expensive than the central bank rate.
The source added that the demands are "non-negotiable."
Regarding the provision of fuel to the Kurdistan Region, Bazoun said, “If the Kurdistan Region needs oil products or LPG gas, we will ship them, and later, according to the agreement, financial dues will be calculated.”
The KRG on Wednesday also announced it will provide residents with subsidized cooking gas to address a market shortage of liquefied petroleum gas (LPG). Operations at the Region’s strategic Khor Mor gas field in Sulaimani province - which provides most of the Region’s LPG - have been halted since the onset of the conflict due to fears of attacks, as the site has been targeted numerous times in the past.
Bazoun also revealed plans to export oil to Syria and said Baghdad is working to reactivate the Iraq-Saudi Arabia pipeline, which has been shut down since the 1990s. He added that currently, around 20,000 tankers transport oil daily to Turkey, Syria, Jordan, and Saudi Arabia.
The push to reroute exports comes as the Strait of Hormuz, the world’s most critical oil shipping corridor, has remained largely closed for 12 consecutive days amid the war. The strait typically handles about 20 percent of all seaborne oil trade.
The conflict has drawn in more than a dozen countries and has already disrupted regional oil production. Before the war, Iraq produced approximately 4.35 million barrels per day, but Rudaw has learned that output has dropped significantly.
The disruption has also forced major oil producers across the region to reduce output and search for alternative export routes as global energy markets face mounting uncertainty.
Diyar Kurda contributed to this report from Washington DC.
Updated at 12:31 pm.