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Iraqi Kurdistan Region’s Oil Output at Risk after Türkiye Halts Pipeline Exports

An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
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Iraqi Kurdistan Region’s Oil Output at Risk after Türkiye Halts Pipeline Exports

An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)
An oil field is seen in Kirkuk, Iraq October 18, 2017. (Reuters)

Oil production in Iraq's semi-autonomous Kurdistan region (KRI) is at risk after a halt in northern exports has forced firms operating there to cease output or divert crude to storage, where capacity is limited.

Iraq was forced to halt around 450,000 barrels per day (bpd) of crude exports, or half a percent of global oil supply, from the KRI on Saturday through an export pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan.

Oil firms in the region have been left in limbo as the pipeline stoppage is set to continue until Ankara, Baghdad and the KRG find a settlement to resume exports.

Türkiye stopped pumping Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Türkiye had violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil to Ceyhan without Baghdad's consent.

The news supported crude prices, with Brent rising over $3 per barrel on Monday.

Canada-based Forza Petroleum, formerly Oryx Petroleum Corporation, said on Monday it was shutting in production from the 14,500 bpd Hawler license in the KRI as storage was nearing full capacity.

Dallas-based HKN Energy, which operates the Sarsang block, said it would shut in operations "within a week if no resolution is reached" as its storage facilities approach capacity.

The block produced 43,038 bpd in the fourth quarter of last year.

HKN wrote to US representatives last year warning that a cessation of exports through the pipeline would trigger a collapse of the KRI economy.

Gulf Keystone Petroleum, which operates the 55,000 bpd Shaikan field in the KRI, said in a statement on Monday that its "facilities have storage capacity that allow continued production at a curtailed rate over the coming days, after which the company will suspend production".

DNO and Genel Energy said they were storing oil in tanks, which can accommodate several days of production.

The two firms hold stakes in the Tawke and Peshkabir fields, which produced 107,000 bpd of oil last year.

Genel also holds stakes in the Taq Taq and Sarta fields, which produced a respective 4,500 bpd and 4,710 bpd last year, according to the company's annual results.

Production at the Khurmala oil field run by Kurdish group Kar was unaffected at around 135,000 bpd and heading into tank, a source familiar with the field operations told Reuters.

Shamaran Petroleum said in a statement: "The company will remain in close contact with the other oil producers in the Kurdistan Region and with relevant government officials, and will continue to monitor this situation closely."

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Saudi Arabia, IFAD Partner to Fight Hunger

Maize planting and harvest season in one of Saudi Arabia’s provinces (File photo courtesy of SPA)
Maize planting and harvest season in one of Saudi Arabia’s provinces (File photo courtesy of SPA)
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Saudi Arabia, IFAD Partner to Fight Hunger

Maize planting and harvest season in one of Saudi Arabia’s provinces (File photo courtesy of SPA)
Maize planting and harvest season in one of Saudi Arabia’s provinces (File photo courtesy of SPA)

Amid a widening global food gap and the mounting impacts of climate change, the International Fund for Agricultural Development (IFAD) has underscored the vital importance of boosting support for agricultural and food-related activities to drive sustainable development in rural areas.

 

The UN agency praised its strong and multifaceted cooperation with Saudi Arabia, highlighting key areas of focus that include food security, rural development, and strengthening resilience to environmental changes.

 

IFAD is also ramping up efforts to promote the “blue economy” as part of its broader strategy to support sustainable development, particularly in rural and coastal communities, a senior official told Asharq Al-Awsat.

 

Naoufel Telahigue, IFAD’s Regional Director for the Near East, North Africa and Europe, said the Rome-based UN agency is working to scale up sustainable use of oceans, seas, and water resources to drive economic growth, improve livelihoods, and safeguard marine ecosystems.

 

“The blue economy is an emerging development approach that recognizes the economic potential of our marine and aquatic resources—when used sustainably,” he said.

 

According to Telahigue, IFAD has implemented more than 100 projects across 35 countries over the past four decades, with total investments exceeding $3.4 billion, of which the Fund contributed $1.5 billion.

 

These projects have reached over 80 million beneficiaries, including fishers, aquaculture farmers, seafood processors, traders, as well as women, youth, Indigenous peoples and persons with disabilities.

 

Currently, over 75 active IFAD-supported projects target fisheries, aquaculture, and livelihoods in coastal zones.

 

The blue economy spans a range of sectors, including sustainable fishing, aquaculture, coastal tourism, marine renewable energy, maritime transport, and waste management. Telahigue said IFAD is focused on helping rural populations reduce poverty, boost food security, improve nutrition, and build resilience to environmental shocks.

 

Since its establishment in 1978, IFAD has provided more than $25 billion in low-interest loans and grants to fund development projects in low- and middle-income countries.

 

Telahigue pointed to a set of challenges hampering IFAD’s mission, including limited funding amid rising global crises, the growing impact of climate change on livelihoods, and poor infrastructure in targeted regions. He also highlighted political instability and armed conflict as key obstacles to project implementation and sustainability.

 

“The lack of inclusivity and equal access to resources remains a major concern,” he added.

 

To address these issues, Telahigue called for strengthening partnerships, adopting innovative financing solutions, and developing flexible, community-based interventions. He stressed the importance of improving monitoring and evaluation systems to ensure long-term sustainability and maximize impact.

 

Saudi Arabia continues to provide robust and diversified support to the International Fund for Agricultural Development (IFAD), with a focus on rural development, food security and climate change adaptation, a senior official at the UN agency said.

 

As a founding member of IFAD, the Kingdom has contributed more than $485 million since 1977, reflecting its long-standing commitment to poverty reduction and strengthening food systems in developing countries, said Telahigue.

 

He described the opening of IFAD’s liaison office in Riyadh in 2019 as a pivotal step toward deepening partnerships with Gulf Cooperation Council (GCC) countries, facilitating knowledge exchange, and rolling out innovative initiatives.

 

Among them is the “reimbursable technical assistance” program, which supports smallholder farmers in Saudi Arabia’s Jazan region with climate-smart production models for crops such as coffee and mango.

 

In 2021, IFAD signed a cooperation agreement with the King Salman Humanitarian Aid and Relief Center to combat hunger and malnutrition in the world’s most vulnerable countries by improving sustainable access to food.

 

Telahigue said IFAD’s goals align closely with Saudi Arabia’s flagship environmental initiatives, including the Saudi Green Initiative and the Middle East Green Initiative, which aim to restore ecosystems and promote environmental sustainability—both on land and across marine and coastal zones.