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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)

Iraq's Kurdistan Regional Government (KRG) is working to establish two oil firms, the latest move in the battle between Erbil and Baghdad to control the oil sector in the semi-autonomous region.

The KRG's new oil firm KROC would specialize in oil exploration, while the second - KOMO - would focus on oil exports and marketing from the semi-autonomous region, a spokesperson said in a statement on Friday.

The regional government has presented the idea and discussed it with the federal government in Baghdad recently, the KRG spokesperson said in a statement.

The statement follows months of disputes between Erbil and Baghdad after a February federal court ruling that deemed the legal foundations of the Kurdistan region's oil and gas sector unconstitutional.

The oil ministry in Baghdad has since made fresh attempts to control revenue from the Kurdistan region, including summoning seven firms operating there to a commercial court on May 19. The firms were Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran and WesternZagros.

The commercial court sitting has been postponed twice as some of the representation for these international oil firms did not have power of attorney, several sources told Reuters. The court session is due to resume on Monday, June 20.

As well as announcing plans to establish its own oil company in the Kurdistan region, the Iraqi oil ministry has ordered international lead contractors and subcontractors through Basrah Oil (BOC) and Iraq's national oil firm (Inoc) to pledge not to work on contracts or projects there.

Through letters sent on June 7 and 12, the firms were given three months to terminate existing contracts or projects in the KRG oil sector or face being blacklisted, according to two sources familiar with the matter.

The oil ministry is using two law firms - Vincent and Elkins and Cleary Gottlieb Steen and Hamilton - to help with gaining control of the KRG oil sector, according to two sources. Both firms have declined to comment.

The KRG has repeatedly rejected the federal court ruling. On June 5, the KRG's ministry of natural resources filed a civil suit against the minister of oil in Baghdad, Ihsan Ismael, for sending emails and letters to intimidate oil firms operating in the Kurdistan region and for interfering with the contractual rights of these firms and the KRG, according to a June 13 statement.

Also on June 5, the Erbil court of investigation ruled that the commercial court sessions against international oil firms must be brought to the Erbil court.

There have been years of attempts by the federal government to bring KRG revenues under its control, including local court rulings and threats of international arbitration.

The implications of the latest dispute are not fully clear as more than eight months since elections in Iraq, the formation of a government is still underway.

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Arab World

17 Nations Urge Israel, Lebanon to Seize Talks ‘Opportunity’

Israeli soldiers stand among destroyed buildings in southern Lebanon, near the Israel-Lebanon border, as seen from the Israeli side of the border in northern Israel, April 14, 2026. (Reuters)
Israeli soldiers stand among destroyed buildings in southern Lebanon, near the Israel-Lebanon border, as seen from the Israeli side of the border in northern Israel, April 14, 2026. (Reuters)
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17 Nations Urge Israel, Lebanon to Seize Talks ‘Opportunity’

Israeli soldiers stand among destroyed buildings in southern Lebanon, near the Israel-Lebanon border, as seen from the Israeli side of the border in northern Israel, April 14, 2026. (Reuters)
Israeli soldiers stand among destroyed buildings in southern Lebanon, near the Israel-Lebanon border, as seen from the Israeli side of the border in northern Israel, April 14, 2026. (Reuters)

Foreign ministers from 17 countries, including the UK, Tuesday urged Israel and Lebanon to "seize this opportunity" in a statement ahead of US-mediated talks between the two nations in Washington.

Britain's foreign ministry posted the ministers' joint statement saying "direct negotiations can pave the way to bring lasting security for Lebanon and Israel as well as the region".

The statement called "upon all parties to urgently deescalate and seize the opportunity offered by the ceasefire between the United States and Iran".

It was signed by ministers from Britain and Australia and European countries such as France, Belgium, the Netherlands and Spain, but not Germany, Austria, Hungary or Italy.

Israel and Lebanon were set to hold the first direct talks in decades between the warring neighbors, mediated by US Secretary of State Marco Rubio.

Lebanon was pulled into the region-wide Iran war on March 2 after Iran-backed Hezbollah attacked Israel in response to the killing of Iranian supreme leader Ali Khamenei.

Since then Israeli strikes -- including an extremely heavy attack on Beirut on April 8 -- have killed more than 2,000 people and displaced more than one million.

The statement said that signatories "condemn in the strongest terms" both attacks by Hezbollah on Israel and "massive Israeli strikes on Lebanon".

The countries said they welcomed the initiative by Lebanese President Joseph Aoun to open direct talks and were "ready to support" discussions.

Arab World

Iraq Hands Over Two Cleared ISIS Suspects to US, Finland

US military vehicles move along a road in a convoy transporting ISIS group detainees being transferred to Iraq from Syria, on the outskirts of Qahtaniyah in Syria's northeastern Hasakeh province on February 7, 2026. (AFP)
US military vehicles move along a road in a convoy transporting ISIS group detainees being transferred to Iraq from Syria, on the outskirts of Qahtaniyah in Syria's northeastern Hasakeh province on February 7, 2026. (AFP)
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Iraq Hands Over Two Cleared ISIS Suspects to US, Finland

US military vehicles move along a road in a convoy transporting ISIS group detainees being transferred to Iraq from Syria, on the outskirts of Qahtaniyah in Syria's northeastern Hasakeh province on February 7, 2026. (AFP)
US military vehicles move along a road in a convoy transporting ISIS group detainees being transferred to Iraq from Syria, on the outskirts of Qahtaniyah in Syria's northeastern Hasakeh province on February 7, 2026. (AFP)

Iraq's judiciary said Tuesday it had handed over two detained foreigners, from Finland and the United States, to their countries after finding that had not been ISIS group members.

Many prisons in Iraq are packed with ISIS suspects.

In February, the United States completed the transfer of 5,700 ISIS detainees, including hundreds of foreigners, from Syria to Iraq.

The National Center for International Judicial Cooperation (NCIJC) said it has handed "two suspects -- a minor from Finland and another from the United States -- to the competent authorities in their countries after it was confirmed that they don't belong to the ISIS terrorists."

"The handover took place after all legal and judicial procedures were completed," the judiciary said in a statement carried by the Iraqi News Agency (INA).

The judiciary did not specify whether the two detainees referred to were among those who had been transferred from Syria.

Upon the detainees' arrival in Iraq, the judiciary began interrogations before taking legal action against suspects from some 60 countries.

These include 3,543 Syrians, 467 Iraqis and 710 detainees from other Arab nations.

There are also more than 980 foreigners including from Europe, Asia, Australia and the United States.

ISIS swept across Syria and Iraq in 2014, committing massacres. Iraq, backed by US-led forces, proclaimed victory over ISIS in the country in 2017, and the Kurdish-led Syrian Democratic Forces ultimately defeated the group in Syria two years later.

Iraqi courts have handed down hundreds of death sentences and life terms to those convicted of terrorism offences, including foreign fighters.

Arab World

UN Official: War Pushes Seven in 10 Sudanese Into Poverty

Saddam Najwa, a malnourished, 17-month-old internally displaced child reaches out for a cup of water at the paediatric ward of the Mother of Mercy Hospital in Gidel, near Kauda, within the Sudan's People Liberation Movement-North (SPLM-N) controlled area of the Nuba Mountains, South Kordofan, Sudan June 25, 2024. REUTERS/Thomas Mukoya/File Photo
Saddam Najwa, a malnourished, 17-month-old internally displaced child reaches out for a cup of water at the paediatric ward of the Mother of Mercy Hospital in Gidel, near Kauda, within the Sudan's People Liberation Movement-North (SPLM-N) controlled area of the Nuba Mountains, South Kordofan, Sudan June 25, 2024. REUTERS/Thomas Mukoya/File Photo
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UN Official: War Pushes Seven in 10 Sudanese Into Poverty

Saddam Najwa, a malnourished, 17-month-old internally displaced child reaches out for a cup of water at the paediatric ward of the Mother of Mercy Hospital in Gidel, near Kauda, within the Sudan's People Liberation Movement-North (SPLM-N) controlled area of the Nuba Mountains, South Kordofan, Sudan June 25, 2024. REUTERS/Thomas Mukoya/File Photo
Saddam Najwa, a malnourished, 17-month-old internally displaced child reaches out for a cup of water at the paediatric ward of the Mother of Mercy Hospital in Gidel, near Kauda, within the Sudan's People Liberation Movement-North (SPLM-N) controlled area of the Nuba Mountains, South Kordofan, Sudan June 25, 2024. REUTERS/Thomas Mukoya/File Photo

Around seven in 10 people in Sudan are now living in poverty, a senior UN official told AFP on Tuesday, nearly twice as many as before the war between the army and paramilitary forces broke out three years ago.

"Before the war, we were probably looking (at) around 38 percent of people living in poverty, and now we are estimating about 70 percent," said the UN Development Programme's Sudan representative Luca Renda, as the agency released a new report on poverty timed to coincide with the anniversary of the start of the war.

The figures Renda cited were based on a poverty line of about $4 a day, while at least a quarter of the population is believed to be surviving on less than half that, he said.

Conditions are particularly severe in some of the worst-affected areas, including parts of southern Kordofan, now the war's main battleground, and North Darfur, where as many as 70 to 75 percent of people are living in deprivation, Renda added.

Now in its fourth year, the war between Sudan's army and the Rapid Support Forces (RSF) has killed tens of thousands of people, displaced more than 11 million, and thrust several areas into hunger and famine.

Donors are due to gather in Berlin on Wednesday for an international conference on the conflict, aimed at reviving faltering peace talks and mobilizing aid for one of the world's worst humanitarian crises.

"Three years into this conflict, we are not just facing a crisis -- we are witnessing the systematic erosion of a country's future," Renda said.

The UNDP report found that nearly seven million people were pushed into extreme poverty in 2023 alone, while average incomes have fallen to levels last seen in 1992. Extreme poverty rates are now worse than in the 1980s, according to the report.

"These figures are not abstract," Renda said. "They reflect families torn apart, children out of school, livelihoods lost and a generation whose prospects are steadily diminishing."

More than 21 million people in Sudan face acute food insecurity, while two-thirds of the population urgently needs assistance, according to the UN.

Analysts, meanwhile, see little sign of de-escalation, with fighting intensifying in the Kordofan region and Blue Nile state, and drone attacks killing more than 500 civilians between January and mid-March, the UN said.