SOMO Confirms Oil Export Agreement with Kurdistan Region to Begin 27 September

Economy 08:01 PM - 2025-09-26

The Director General of Iraq’s State Oil Marketing Organisation (SOMO), Ali Nizar Al-Shatr.

The Director General of Iraq’s State Oil Marketing Organisation (SOMO), Ali Nizar Al-Shatri, confirmed that the agreement on exporting oil from the Kurdistan Region’s fields will come into force on Saturday, 27 September 2025.

Speaking at a press conference on Friday evening, Al-Shatri said: “We reaffirm the announcement by the Iraqi government regarding a comprehensive, professional and fair agreement reached with the Ministry of Natural Resources in the Kurdistan Region and the companies operating in its fields. This arrangement ensures that crude oil produced in the Region will be delivered to SOMO and transported to the Turkish port of Ceyhan, where it will enter the international market through proper legal and contractual mechanisms.”

He added that around 50,000 barrels per day would be allocated for local consumption under the management of the Kurdistan Region’s Ministry of Natural Resources. According to Al-Shatri, this long-awaited agreement implements the federal three-year budget law (2023–2025) and its 2025 amendment, following over 30 months of negotiations conducted in what he described as a professional, positive and patriotic atmosphere.

The SOMO chief highlighted the European market’s urgent need for this crude as an alternative to dwindling Russian supplies, stressing that Ceyhan’s location on the Mediterranean placed it at the heart of the European energy market, while also offering access to North and South American buyers.

Reassessing Production Costs

Al-Shatri noted that the deal was reached thanks to determined and constructive negotiations that prioritised Iraq’s unity and its oil revenues as the backbone of the federal budget. Direct talks were also held with producing companies in the Region, leading to assurances and a robust mechanism to safeguard their entitlements.

The agreement provides for compensation of $16 per barrel delivered to SOMO, with payments to be deposited into Iraq’s account at the US Federal Reserve in the name of the Central Bank of Iraq. The Kurdistan Region’s Ministry of Natural Resources will receive compensation in kind, through equivalent volumes of crude produced from its own fields, following global norms already applied in southern Iraq. Proceeds from sales by commercial companies will be deposited into the KRG’s account to settle dues with producing firms.

He further explained that an international consultancy would be commissioned by the federal Ministry of Oil to reassess production and transport costs in the Region. Should these be found to differ from the $16 benchmark, compensation will be adjusted retroactively from the date SOMO begins receiving crude, scheduled for 6:00 a.m. on 27 September 2025.

Towards Long-Term Understandings

Al-Shatri underlined that this was not a temporary measure but a foundation for long-term arrangements and a final settlement of previous disputes. He described it as a demonstration of the federal government’s, the Kurdistan Regional Government’s, and operators’ commitment to ending smuggling concerns and production outside state oversight.

He concluded by noting that revenues from these exports would be directed to the federal budget, enabling the Iraqi government to meet its financial obligations for this year and beyond.



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