Crude oil production in Iraq’s semi-autonomous Kurdistan region stands at about 350,000 barrels per day (bpd). However, this oil is sold at significant discounts to local buyers because the crucial export pipeline to Turkey’s Mediterranean coast remains closed.
Kurdistan’s oil output has decreased by approximately 50,000 bpd since before March 2023, when the pipeline to Turkey’s Ceyhan port was shut due to an international dispute. Myles Caggins, a spokesperson for the Association of the Petroleum Industry of Kurdistan (Apikur), shared these figures with Argus.
The pipeline, which previously carried around 450,000 bpd of Kurdish oil to Turkey, was halted in March 2023. This shutdown followed a dispute over the authorization of Kurdish oil exports. An International Chamber of Commerce ruling in March 2023 favored Iraq, which argued that Turkey should not permit Kurdish oil exports through the Iraq-Turkey pipeline and Ceyhan port without federal Iraqi approval.
Despite the ongoing pipeline closure, Apikur members continue to produce oil but must sell it to local buyers at steep discounts, approximately $45-$50 per barrel below international prices, according to Caggins.
“The volume of production has generally increased since the pipeline closure in March 2023. All Apikur members remain focused on reopening the pipeline for exports,” Caggins told Argus.
While Kurdistan has been unable to export oil via the pipeline for over a year, crude oil is still smuggled out of the region. Tank trucks, estimated to number over 1,000, transport around 200,000 bpd of Kurdish oil to Iran and Turkey, according to a Reuters investigation.