September 22, 2025 [Reuters]- Iraq, OPEC’s second-largest producer, has given preliminary approval to a plan to resume pipeline oil exports from its semi-autonomous Kurdistan region through Turkey following delays to a hoped-for restart, sources familiar with the talks told Reuters.

The deal between Iraq’s federal government, the Kurdistan Regional Government and international oil companies could add at least 230,000 barrels per day of fresh supplies at a time OPEC producers are raising output to regain market share.

Iraq exports around 3.4 million barrels of oil per day from its southern ports, but the Kirkuk-Ceyhan pipeline in the north has been shut since March 2023 after an arbitration court ruled that Turkey should pay $1.5 billion in damages for unauthorised exports between 2014 and 2018. Turkey is appealing the ruling.

Ankara has since said it is willing to restart exports, but the flows remain suspended because of ongoing legal and political disputes between Baghdad, the Kurdistan Regional Government in Erbil, and the international oil companies.

Iraq’s cabinet has given preliminary approval to a plan to resume exports, and international oil companies operating in Kurdistan have also tentatively agreed, two sources familiar with the talks said.

APIKUR, a group representing firms including Genel Energy, DNO and Gulf Keystone, declined to comment, citing ongoing negotiations.

“Discussions have intensified and we’re closer to a tripartite agreement… than we’ve ever been, as all are showing flexibility,” an executive from one of the international oil companies said.

Under the preliminary plan, the KRG would commit to delivering at least 230,000 bpd to Iraq’s state oil marketer SOMO, while keeping additional 50,000 bpd for local use.

An independent trader would handle sales from Ceyhan using SOMO’s official prices.

For each barrel sold, $16 would be transferred to an escrow account and distributed proportionally to producers. The remainder of the revenue would go to SOMO.

The draft plan also does not specify how or when producers will receive about $1 billion in unpaid arrears, accumulated between September 2022 and March 2023.

Luke Clements, CFO of Genel Energy, told a conference in Oslo last week that there had been significant progress made in drafting agreements to restart pipeline exports.

“But it still needs to get over the line,” he added.