Iraqi Government, SOMO Renew Tripartite Agreement for Oil Exports

The State Organization for Marketing of Oil (SOMO) has announced the renewal of its tripartite agreement with the Iraqi government and the Kurdistan Regional Government. The agreement, which was set to expire, has been extended for six months with the possibility of another six-month extension. SOMO's director general, Ali Nizar, stated that the tripartite agreement is contingent on the renewal of the Iraq-Turkey oil export contract.

The Iraqi and Turkish energy ministries signed a new one-year agreement on August 1, allowing Iraq to export oil through Turkey's Ceyhan port with a minimum commitment of 750,000 barrels per day. Nizar noted that transport costs have increased up to fourfold and insurance costs have risen tenfold due to heightened risks in the Strait of Hormuz.

The agreement comes as oil production and exports from the Kurdistan Region experience significant declines following regional tensions. SOMO had previously received deliveries ranging from 210,000 to 220,000 barrels per day but has since dropped to nearly 50,000 barrels per day due to military tensions and attacks on oil fields.

The resumption of exports follows a prolonged dispute over the legal framework governing Kurdish oil exports. The International Court of Arbitration in Paris previously ruled against Turkey regarding the independent transport of Kurdistan Region's oil exports.