Iraq is seeking alternatives to save its oil income following the closure of the Strait of Hormuz, which brought oil exports through its southern ports to a near halt and posed a significant fiscal challenge to the government.

The federal government in Baghdad is attempting to restart the northern pipeline, which runs through Iraqi Kurdistan to the Turkish port of Ceyhan.

The plan aims to export approximately 300,000 barrels per day of oil from northern fields, particularly those in the Kirkuk province, as a tactical measure to alleviate some of the rising economic losses.

The approach faces challenges as the Kurdistan Regional Government (KRG) has refused to resume exports, citing requirements related to payments owing to international oil corporations operating in Kurdistan.

Iraqi Kurdistan’s Ministry of Natural Resources asks $16 per barrel to cover extraction expenses, but Baghdad offers a lower value.

Actual reasons such as assaults on oil infrastructure and the full suspension of production in some fields support Erbil’s point of view.

The issue is made worse by the upcoming expiration of the 1973 agreement between Baghdad and Ankara, which Turkish President Recep Tayyip Erdogan has declared would end by next July.

Ankara wants to negotiate a new accord with different economic and geopolitical parameters that would guarantee it larger profits.

Oil accounts for approximately 90 percent of Iraq’s revenue. Any disruption in exports would pose a direct danger to the government’s ability to meet its fundamental commitments, such as paying wages and supporting the state’s operational budget.
Source: IraqiNews.com