Kurdish PM Masrour Barzani and Iraqi PM Mohammed Shia al Sudani signed an agreement to resume Kurdistan’s oil export to Turkey. A High official delegation including Masrour Barzani visited Baghdad on Tuesday to sign the deal.
The agreement comes after the Paris Court ruled in favour of Iraq. Both Prime ministers announced the agreement in a joint press conference, considering the deal as “temporary”.
The agreement is temporary and its principles will reflect in the federal budget and the oil and gas law. Kurdish media reported that halting Kurdistan’s oil export highly impacted Iraq not only Kurdistan.
In the joint press conference Iraqi PM al Sudani said that the agreement would pave the way for the passing of the federal budget.
Both leaders expressed their gratitude for the high cooperation between Erbil and Baghdad to solve the issues.
The agreement shows the desire of the Iraqi and Kurdistan Regional governments to surpass the obstacles and problems which were inherited over the years.
The halt in Kurdistan’s oil export imperilled the production of around 500,000 barrels of oil per day. The halt of oil export to Turkey also caused a 5.7 per cent rise in oil prices.
The deal may restore stability in the oil market and serve as a guarantee for foreign oil companies working in the Kurdistan oil industry.
After declaring the agreement, citizens and high officials on both sides expressed their joy on social media platforms. As the agreement will serve as a reassurance to the KRG employees’ salaries. After signing the agreement, Masrour Barzani returned to the Kurdistan Region. And He thanked President Massoud Barzani and KRG President Nechirvan Barzani for their important role and support.
As a result of the agreement, KRG’s Ministry of Finance and Economy published the salary distribution list.Last month, a budget agreement was reached between Erbil and Baghdad, with Iraq finally passing a budget after nearly a year without one in place.
Articles of Of Baghdad-Erbil agreement:-
Last month, Erbil and Baghdad reached an agreement about budget with Iraq. Though Iraq passed a budget after nearly a year without one in place.
Here is the list of Baghdad-Erbil agreement about Kurdistan’s oil exports:-
- According to the agreement, Iraqi oil marketing company SOMO will be marketing Kurdistan’s oil alongside KRG’s Ministry of Oil. And Kurdish oil will be sold at the same price as Iraqi oil.
- The oil revenues of Kurdistan will be deposited in a new bank in Kurdistan under It under Iraqi government’s supervision. And only KRG prime minister will have the authority to deal with the revenue.
- In addition to legalisation, A Kurd will be the deputy director of the Iraqi Oil Marketing Company (SOMO) and will be responsible for all contracts and oil revenues throughout Iraq.
- Iraq must recognize and legalise Kurdistan’s oil export.
- KRG received the legitimacy to sell its oil through Turkey.
Following the agreement, the Iraqi authorities expect developments that may affect the political atmosphere in Iraq. They do not want to oppose any interests of the US and Western countries. Russia-Ukraine war has led to an increase in oil prices by suspending the export of about half a million barrels of oil.
Halting the export of KRG’s oil has greatly impacted Israel, as Israel is highly dependent on KRG’s oil.
Kurdistan’s oil export and Paris CCIP
The International Chamber of Commerce (ICC) arbitration court ruled on March 23 that Turkey had violated the 1973 pipeline agreement. This decision led Turkey to halt any oil exports by KRG. The ICC’s decision caused great fear among the Kurdish people. Because the KRG greatly relies on oil revenues to pay the salaries of its employees.
This made KRG and the central government reach an agreement to export Kurdistan oil as soon as possible. At the same time, it caused Iraq a huge negative impact as its gross domestic product declined.
Some sources say that the US has pressured Iraq to reach an agreement with Kurdistan as soon as possible so that oil prices would decrease.
According to news reports, the Kurdistan Regional Government (KRG) President and Massoud Barzani welcomed the agreement. In 2014, Iraq cut the Kurdistan Region’s budget, which is a constitutional right of the Kurdistan Region. So the KRG started exporting the Region’s oil and had no choice but to accept unbalanced deals back in 2014.
Finally, After the Agreement, the Iraqi oil ministry officially asked Turkey to resume the exports.
