Kirkuk Oil Exports Restart: How Iraq–KRG Deal Is Shaking Global Oil Markets?
Iraq and the Kurdistan Region agree to resume Kirkuk oil exports via Ceyhan, as global oil prices drop amid Iran tensions and Strait of Hormuz disruption.
In a post on the social media platform X, Masrour Barzani, Prime Minister of the Kurdistan Region of Iraq, said: “Given the extraordinary circumstances facing the country, and the responsibility we all share to get through this difficult chapter, we have decided to allow oil to flow through the Kurdistan Region’s pipeline as soon as possible. In parallel, our discussions with Baghdad will continue with urgency to lift the restrictions on imports and trade into the Kurdistan Region, and to secure guarantees for oil and gas companies so they can safely resume production.”
The Hindu Business Line has reported that At 9.58 am on Wednesday, March crude oil futures were trading at ₹8,604 on MCX during the initial hour of trading on Wednesday against the previous close of ₹8,871, down by 3.01%.
Crude oil futures traded lower on Wednesday morning after the Iraqi government and the Kurdistan Regional Government agreed to resume oil exports to the Ceyhan energy hub in Turkey.
At 9.58 am on Wednesday, May Brent oil futures were at $101.17, down by 2.18 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $92.56, down by 3.11 per cent. March crude oil futures were trading at ₹8604 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹8871, down by 3.01 per cent, and April futures were trading at ₹8610 against the previous close of ₹8844, down by 2.65 per cent.
Citing Iraqi state media reports, a Reuters report said oil flow from Ceyhan port is expected to start at 7.00 GMT on Wednesday.
In their Commodities Feed for Wednesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said ICE Brent has now settled above $100 a barrel for four consecutive days. With no sign of de-escalation in West Asia, the market continues to consolidate above this key level. Oil flows remain largely constrained, despite hopes that Iran might allow additional tankers to move through the Strait of Hormuz to select countries. However, if Iran’s plan is to inflict pain through higher energy prices, the number of tankers it allows through the Strait of Hormuz may be very limited, they said.
Confirmation of the death of Iran’s security chief, Ali Larijani, only increases uncertainty for markets. It’s unlikely to lead to de-escalation.
Energy infrastructure across the Persian Gulf continues to be targeted by Iran, with the UAE’s Fujairah port being targeted multiple times. Meanwhile, upstream production continues to decline as producers try to manage storage constraints.
There are reports that the UAE and Kuwait oil cuts are now as much as 1.5 million barrels a day and 1.3 million barrels a day, respectively. This is on top of roughly 2.9 million barrels a day and 2-2.5 million barrels a day of reported supply cuts from Iraq and Saudi Arabia, they added.
Meanwhile, US President Donald Trump took to the social media platform Truth Social to express his displeasure over NATO allies.
In a post Truth Social, he said: “The United States has been informed by most of our NATO “Allies” that they don’t want to get involved with our Military Operation against the Terrorist Regime of Iran, in the Middle East, this, despite the fact that almost every Country strongly agreed with what we are doing, and that Iran cannot, in any way, shape, or form, be allowed to have a Nuclear Weapon. I am not surprised by their action, however, because I always considered NATO, where we spend Hundreds of Billions of Dollars per year protecting these same Countries, to be a one way street — We will protect them, but they will do nothing for us, in particular, in a time of need. Fortunately, we have decimated Iran’s Military — Their Navy is gone, their Air Force is gone, their Anti-Aircraft and Radar is gone and perhaps, most importantly, their Leaders, at virtually every level, are gone, never to threaten us, our Middle Eastern Allies, or the World, again! Because of the fact that we have had such Military Success, we no longer “need,” or desire, the NATO Countries’ assistance — WE NEVER DID! Likewise, Japan, Australia, or South Korea. In fact, speaking as President of the United States of America, by far the Most Powerful Country Anywhere in the World, WE DO NOT NEED THE HELP OF ANYONE!”
March natural gas futures were trading at ₹273.70 on MCX during the initial hour of trading on Wednesday against the previous close of ₹280.90, down by 2.56 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March jeera contracts were trading at ₹21935 in the initial hour of trading on Wednesday against the previous close of ₹21600, up by 1.55 per cent.
April turmeric (farmer polished) futures were trading at ₹14,928 on NCDEX in the initial hour of trading on Wednesday against the previous close of ₹14,778, up by 1.02 per cent.
Arab News through AFP also reported that Iraq resumes Kirkuk crude exports via Ceyhan after Baghdad- KRG deal.
AP has also reported that the North Oil Company has said that Kirkuk crude exports would resume at an initial capacity of 250 k barrels per day. Also that the Iraqi presidency had urged both sides of Baghdad and KRG to cooperate to resume oil exports. Iraq's parliament also called on the federal government to find outlets for Iraqi crude to avoid the current security conditions causing economic damage, the state news agency reported.
Kurdish officials say tensions with Baghdad have risen after the federal government implemented a new electronic customs system earlier this year, allowing it to monitor imports and revenue, a step the KRG sees as undermining its autonomy and control over trade.
Under pressure to mitigate the losses, Iraq’s state oil company SOMO signed contracts with international carriers and buyers to export crude oil via Turkiye, Jordan and Syria, SOMO said in a statement on Wednesday.
Iraq’s oil ministry sent a letter in early March to the KRG seeking permission to pump at least 100,000 bpd of crude from Kirkuk oilfields through the Kurdistan pipeline network to Turkiye’s Ceyhan energy hub, two oil officials told Reuters last week.
Barzani later said on X that during a phone call with US envoy Tom Barrack, he had told the KRG team to provide all necessary facilities to resume oil exports. Iraq’s Kurdish authorities said on Sunday that Baghdad had failed to address security and economic challenges facing the oil sector.
Iraq’s oil ministry had earlier said the KRG had refused to let it use a pipeline as an alternative route for crude flows disrupted by the Iran conflict and that authorities had put in place arbitrary conditions.
Oil production from Iraq’s southern oilfields, where most of its crude is produced and exported, had fallen by 70 percent to just 1.3 million barrels per day, sources told Reuters on March 8, as the Iran conflict effectively shut the Strait of Hormuz through which some 20 percent of global oil passes.
The drop in production and exports is set to strain Iraq’s already fragile finances as the state relies on crude sales for nearly all public spending and more than 90 percent of its income.
KRG Prime Minister Masrour Barzani said in a post on X the region would allow crude exports through the Kurdistan pipeline as soon as possible given “the exceptional circumstances the country is confronting.”
“Discussions with Baghdad will continue to urgently lift restrictions on imports and trade to the region, and to provide the necessary guarantees to oil and gas companies to ensure they can resume production in a safe environment,” he added.
Thomson Reuters also reported that Iraq’s oil ministry sent a letter in early March to the KRG seeking permission to pump at least 100,000 bpd of crude from Kirkuk oilfields through the Kurdistan pipeline network to Turkey’s Ceyhan energy hub, two oil officials told Reuters last week.
Kurdish officials say tensions with Baghdad have risen after the federal government implemented a new electronic customs system earlier this year, allowing it to monitor imports and revenue, a step the KRG sees as undermining its autonomy and control over trade.
The KRG confirmed the agreement, saying in a statement the two sides would form a joint committee to prepare to resume oil exports and that revenue would be returned to the federal treasury.
The North Oil Company added that Kirkuk crude exports would resume with an initial capacity of 250,000 barrels per day.
The two sides agreed to take the necessary security measures to protect oilfields and ensure the continuity of export operations, the KRG said.
International oil prices, which have risen by roughly 30% to over $100 a barrel since the U.S.-Israeli war on Iran began last month causing severe disruption of oil flows, fell 1.46%, to $101.91 on Wednesday.
The Straits Time also reported that Iraq’s Kurdish authorities said on March 15 that Baghdad had failed to address security and economic challenges facing the oil sector, rejecting an accusation that they were refusing to allow crude exports through a regional pipeline.
Production plunge from Iran conflict
Earlier on March 17, the Iraqi presidency urged both the Iraqi federal government and the KRG to cooperate to resume crude oil exports, a presidency statement said.
Iraq’s Parliament on March 18 also issued a seven-point decision during a session devoted to oil exports through the Ceyhan pipeline, calling on the federal government to find outlets for Iraqi crude to avoid economic damage amid current security conditions, the state news agency reported.
The parliamentary decisions appeared aimed at reinforcing Baghdad’s authority over the country’s oil sector and followed a late meeting on March 17 with Iraq’s oil minister to assess the impact of halted oil exports after the closure of the Strait of Hormuz.
In a statement, parliament said it was prepared to approve any measures needed to support that effort and called on the federal government to assert control over all sources of oil production, transport and distribution.
It also urged the government to supply fuel oil to state-run and private factories to prevent refinery stockpiles from rising, and to rehabilitate the Iraqi pipeline route from Kirkuk through western Mosul, Zummar and Fishkhabour toward Ceyhan.
Oil production from Iraq’s main southern oilfields, where most of its crude is produced and exported, has plunged 70 per cent to just 1.3 million barrels per day (bpd), sources told Reuters on March 8, as the Iran conflict effectively shut the vital Strait of Hormuz through which some 20 per cent of global oil passes.
Iraq’s oil ministry sent a letter in early March to the KRG seeking permission to pump at least 100,000 bpd of crude from Kirkuk oilfields through the Kurdistan pipeline network to Turkey’s Ceyhan energy hub, two oil officials told Reuters last week.
Kurdish officials say tensions with Baghdad have risen after the federal government moved to implement a new electronic customs system, allowing it to monitor imports and revenue, a step the KRG sees as undermining its autonomy and control over trade.
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