In order to sell oil.. Baghdad and Kurdistan agree on a new mechanism

After long disagreements, it seems that the Baadad government and Iraqi Kurdistan have finally agreed on a joint mechanism for selling the region’s oil.

Senior sources reported that representatives of the Kurdistan Region and the federal government agreed on a new mechanism for selling oil “in a joint manner,” during a meeting they held on Friday in Baghdad, according to what the Kurdish Rudaw Agency reported.

new buyers

Other meetings will be held “to agree on oil contracts for the Kurdistan region and jointly find new buyers for oil from the Turkish port of Ceyhan, in addition to the existing buyers,” in a move that would reassure the companies producing and buyers of the region’s crude.

In addition, it stated that all companies that buy the region’s oil have been informed of the need to sign new purchase contracts, as oil will be sold from now on according to international prices, and not at a discount of $10 per barrel, as was the case in the past.

With this step, Kurdistan’s oil will be sold at the same price at which the Iraqi Oil Marketing Company “SOMO” sells crude, with the approval of the federal government

An oil field in Kurdistan (Reuters)

This agreement came after Baghdad won last month an international arbitration lawsuit, which led to the suspension of the Kurdistan region’s exports of crude through the Turkish port of Ceyhan.

The origin of the dispute

The Kurdistan government exports oil through its pipeline to the Faysh Khabour region on the northern Iraqi border, from where it enters Turkey and is pumped to the Turkish port of Ceyhan on the Mediterranean coast.

It is noteworthy that this thorny file dates back to years ago, since the Northern Region began exporting crude oil away from the federal government in 2013, which angered Baghdad, which repeatedly denounced the illegality of this behavior.