Iraqi Kurdistan Starts Oil Exports

Major news out of Iraq is getting drowned out by falling oil price coverage. The Kurdish Regional Government and Iraq’s central government today reached an agreement on exporting oil and sharing revenue.

The KRG will release 500,000 or 550,000 barrels of oil per day (reports conflict on this here and here) to Iraq’s State Oil Marketing Organization in exchange for a 17% percent share of the national budget. The oil will be exported through Turkey.

Although the pact falls short of solidifying an elusive national oil and gas law, it represents progress toward that goal. The fight against ISIS militants is an area of common ground between Baghdad and Erbil that helped motivate the deal. In fact, the central government will pay $1 billion to bolster the KRG’s peshmerga forces in another facet of the agreement.

“This deal is a win-win deal for both sides,” Iraqi Finance Minister Hoshyar Zebari, a Kurd, told the Associated Press. “The (Kurdish government) needed more stability in its relations with Baghdad and the Iraqi government is going through very serious financial difficulties because of the drop in oil prices.” – Washington Post

Shares of western companies operating in the Kurdish region reportedly jumped on the news.