SOMO Says Contracts Finalised as Kurdistan Oil Exports Remains Stalled

PUKMEDIA

KRG & Iraqi Government's logos.

Iraq's State Organization for Marketing Oil (SOMO) announced on Tuesday, 16 September 2025, the completion of all contracts and obligations with companies purchasing oil produced in the Kurdistan Region, while a senior source stressed that Kurdistan Region's oil export resumption remains unlikely anytime soon.

A senior source in Baghdad told PUKMEDIA that reports regarding the export of oil through SOMO are unfounded, adding that while Erbil and Baghdad have reached several agreements, none have been put into effect.

The source stated: “Both governments are responsible for starving the people of the Kurdistan Region. The meetings and the outcomes of the committees have produced nothing of substance and have only wasted time.”

SOMO Director General Ali Nizar al-Shatri told the Iraq's state media (INA): “What happened in the Kurdistan Region is a matter of understanding and establishing working mechanisms,” warning that the “law applies to everyone.”

He explained that both the Iraqi Ministry of Oil and the Kurdistan Region’s Ministry of Natural Resources operate within a single framework, as all oil produced is Iraqi oil. The distinction, he said, lies only in the relationship between the regional authorities and the companies involved.

Shatri noted that the federal government, the regional government, and producing companies must complete the mechanism for implementing the budget law, with significant progress already achieved. He confirmed that discussions continue with the aim of reaching a final agreement that would allow the resumption of crude oil pumping to the Turkish port of Ceyhan and the restart of exports.

Currently, oil produced in the Kurdistan Region is consumed locally, Shatri explained. 

"We are working under the 2025 budget law, to redirect surplus production after local demand for export," he said. SOMO, he added, has finalised all contracts with former purchasing companies and stands ready to receive quantities as soon as they are delivered by the regional government and producers.

Highlighting the importance of exports, Shatri said the resumption of exports would reinforce Iraq’s standing as a primary source of oil for Europe, particularly at a time of reduced Russian supplies. 

He stressed, however, that SOMO has yet to receive any oil from the Kurdistan Region’s Ministry of Natural Resources, with contractual obligations currently remaining between that ministry and the producing companies.

The long-running dispute over oil exports from the Kurdistan Region remains unresolved despite repeated rounds of negotiations between Baghdad, Erbil and Ankara. Economists warn that the deadlock is exacerbating Iraq’s fiscal deficit and undermining its development plans.

Exports through Türkiye’s Ceyhan port were halted in March 2023, following an arbitration ruling by the International Chamber of Commerce in Paris. The tribunal determined that Türkiye had breached a 1973 pipeline transit agreement by permitting the Kurdistan Regional Government (KRG) to export crude independently of Baghdad.

The pipeline has since been shut down, awaiting an agreement between the Iraqi federal government and the KRG. Negotiations have since faltered, hindered by disagreements over revenue-sharing, non-oil income, and the terms of contracts with international oil companies.

The prolonged suspension has dealt a heavy blow to the Kurdistan Region’s economy, curtailed Iraq’s overall export capacity, and placed mounting strain on the budgets of both administrations.



PUKMEDIA