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Kurdistan and Iraqi Government Reach preliminary Agreement on New Mechanism for Joint Oil Sales

Gulan Media April 1, 2023 News
Kurdistan and Iraqi Government Reach preliminary Agreement on New Mechanism for Joint Oil Sales

In a positive development, the Kurdistan Region and the federal government in Baghdad have agreed on a new mechanism for jointly selling Kurdistan oil. According to Rudaw News Network, representatives from both sides held a meeting yesterday to discuss the new agreement.

Further meetings will be held to finalize oil contracts for the Kurdistan Region and to find new buyers for Kurdistan oil from the Jihan port, in addition to current buyers. This step is expected to reassure both producing and buying companies of Kurdistan oil.

Kurdistan Regional Government President Nechirvan Barzani sent a message to Iraqi Prime Minister Mohammed Shia' Al-Sudani, while Kurdistan Regional Government Prime Minister Masrour Barzani held talks with the Iraqi Prime Minister during a phone call to negotiate the new agreement.

As per the agreement, all companies that buy Kurdistan oil will need to sign new contracts, where Kurdistan oil will be sold at international prices, not at a $10 lower price. This move will ensure that the sale of Kurdistan oil is approved by the Iraqi government.

International oil companies have confirmed that there is a great opportunity to resume oil exports following the new agreement. Directors, advisers, and analysts in international oil companies have expressed their optimism about the agreement between the Kurdistan Regional Government and the federal government, given the good relations between the two sides.

Richard Bronze, an energy affairs analyst at Speake Energy, stated to Rudaw that the Kurdistan Regional Government has good relations with the government of Mohammed Shia' Al-Sudani, and "there is a great opportunity for an agreement between them." He further added that "there is an opportunity to reach an agreement between the Kurdistan Regional Government and the Iraqi government, at a time when the market needs Kurdistan's oil."

This agreement is expected to bring a positive impact on the region's economy and strengthen the relationship between the Kurdistan Region and the federal government in Baghdad.

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