In a significant development for the Iraqi oil sector, the country's oil ministry announced on Saturday that all necessary procedures have been finalized to restart oil exports through the crucial Iraq-Turkey pipeline. This announcement marks a major step towards resolving a nearly two-year-long dispute that has severely disrupted crude oil flows, impacting both the Iraqi economy and global energy markets.

Iraq has announced plans to export 185,000 barrels of crude oil per day from Kurdistan's oilfields through the Iraq-Turkey pipeline once shipments resume, according to deputy oil minister for upstream operations Basim Mohammed.

He stated that while the Kurdistan Regional Government's (KRG) oilfields have a total export capacity of 300,000 barrels per day, a portion of that is allocated for domestic use, leaving the remaining 185,000 barrels designated for export. The Iraqi government has engaged with Turkey to ensure the pipeline's readiness at the port of Ceyhan.

Central to the resolution efforts have been a series of technical talks between Baghdad and Erbil to iron out operational details required for the resumption of exports. These discussions established a mutually acceptable payment mechanism for oil companies operating in the Kurdistan region, ensuring transparency and fairness in revenue distribution.

The recent approval by the Iraqi parliament of a budget amendment on February 2 also played a pivotal role in facilitating this progress. The amendment stipulates a fixed rate of $16 per barrel for oil transport and production costs within the Kurdistan region, providing a clear financial framework for operations. Crucially, the amendment also mandates the KRG to transfer its oil output to the State Oil Marketing Organization (SOMO), the state-run entity responsible for Iraq's oil exports.

The oil ministry's Saturday statement serves as a formal call to action for the KRG, urging them to commence the delivery of crude oil to SOMO. This step is essential for the actual resumption of exports through the pipeline.

The prolonged disruption of oil exports through the Iraq-Turkey pipeline has had significant economic repercussions for Iraq, a nation heavily reliant on oil revenues. The dispute, stemming from disagreements over revenue sharing and contractual obligations, resulted in a substantial decline in oil exports and impacted Iraq's fiscal stability.

Furthermore, the situation attracted international attention, with the United States reportedly exerting pressure on Iraq to resolve the dispute and allow the resumption of Kurdish oil exports. While an Iraqi official later denied any direct pressure or threats of sanctions, the U.S. interest underscores the strategic importance of Iraqi oil in the global energy landscape.