By Payraw Anwar
After more than two years of suspension, the Kurdistan Regional Government (KRG) and the federal government in Baghdad have reached a breakthrough agreement to resume oil exports from the Kurdistan Region through Türkiye’s Ceyhan port. The decision marks a significant moment in Iraq’s energy and political landscape, reflecting not only the importance of oil to Iraq’s economy but also the delicate balance of power between Baghdad and Erbil.
The Kurdistan Region began independently extracting and exporting oil in 2009—an unprecedented step in its history since the region’s establishment in 1992. The Iraqi Constitution of 2005 provides a legal framework for resource sharing, with Article 111 declaring that oil and gas “are owned by all the people of Iraq in all the regions and governorates.” This principle, in theory, grants every region—including Kurdistan—the right to benefit from and manage its own natural resources. However, the absence of detailed legislation to regulate the distribution and management of oil has left plenty of room for disputes, leading to frequent political and legal confrontations between Erbil and Baghdad.
A Constitution Without a Law
At the heart of the dispute lies a constitutional ambiguity. While Iraq’s federal constitution recognizes shared ownership of resources, there is no specific oil and gas law that clearly defines how these resources should be managed and revenues distributed. This gap has created decades of friction between the central government and the Kurdistan Region. Baghdad has often accused Erbil of exceeding its constitutional authority by independently managing its oil sector, while the KRG argues that federalism grants it such rights.
This conflict is not merely legal but deeply political. Iraq’s modern political history has been dominated by efforts from successive governments to centralize authority, often at the expense of regional autonomy. The federal system, introduced after 2003, was meant to distribute power more evenly, but many Iraqi leaders in Baghdad continue to pursue a centralizing agenda. In this sense, disputes over oil exports are less about technical details and more about who ultimately holds power in a federal Iraq.
The suspension of Kurdistan’s oil exports in 2023 was driven by several key concerns. First, Baghdad feared that the Kurdistan Region was building an independent economic base that could pave the way for political independence—a concern heightened after the 2017 independence referendum in which an overwhelming majority of Kurds voted in favor of secession. Second, many Arab political elites, shaped by Iraq’s long history of centralized governance from 1921 until 2003, have been reluctant to accept a truly federal system. To them, regional control over oil represents a threat to Iraq’s sovereignty and unity.
Implications of the New Agreement
The recent agreement to restart exports is more than just an economic arrangement—it is a political signal. For Baghdad, it represents a compromise to keep the Kurdistan Region within the framework of the Iraqi state. For Erbil, it is a chance to reassert its role as a key energy player and safeguard its semi-autonomous status. Importantly, the deal also acknowledges the role of international oil companies operating in Kurdistan. These companies, as non-state actors, are central to Iraq’s energy future and must be compensated for their investments as exports resume. Their involvement underscores how oil politics in Iraq are intertwined with global markets and international diplomacy.
Looking ahead, this agreement could serve as a foundation for a more stable relationship between Baghdad and Erbil. If implemented effectively, it might foster greater trust, enhance governance, and ensure that both sides benefit from Iraq’s vast natural resources. Moreover, with general elections in Iraq on the horizon, the deal may also have wider political implications, potentially reshaping alliances and influencing voter perceptions of federalism and regional autonomy. The KRG–Baghdad agreement is not just about oil pipelines and revenues; it reflects deeper questions of sovereignty, identity, and governance in Iraq.