Baghdad and Erbil forge pact to shield Kurdistan oil infrastructure

Authorities in Baghdad and Erbil have agreed a joint security framework to protect international oil companies operating in northern Iraq. The strategic initiative is designed to insulate energy infrastructure from regional hostilities and facilitate the sustained resumption of crude exports.

Following talks in Erbil on June 14, military officials confirmed a co-ordinated strategy to defend upstream assets. Rudaw reported that an Iraqi delegation led by Army Chief of Staff Abdul Amir Yarallah met senior Kurdish figures, including Kurdistan Region President Nechirvan Barzani and Prime Minister Masrour Barzani.

Sabah al-Numan, military spokesperson for Iraqi Prime Minister Ali al-Zaidi, said an agreement was reached to develop robust plans to protect oil companies and halt targeted attacks. He said this would create the necessary conditions to revitalise the broader economy and support critical reconstruction efforts.

The security guarantee follows a period of severe disruption for the Kurdish energy sector. Following the outbreak of the US-Iran conflict in late February, upstream facilities faced intense bombardment from pro-Iranian militias. Regional authorities recorded at least 809 drone and missile strikes targeting the area between February 28 and April 20.

A source told Rudaw that Yarallah’s primary objective was to strengthen military relations between the two capitals. The source added that the army chief expressed his readiness for any necessary steps to protect the oil fields of the Kurdistan Region.

The discussions prioritised closing operational vulnerabilities. Numan said the meetings featured a mutual reaffirmation of continued joint cooperation between the federal army and Kurdish Peshmerga forces to fill security gaps and pursue militant elements. He added that both administrations view the uninterrupted flow of exports as a strategic necessity for national recovery.

Beyond physical security, Baghdad is advancing efforts to resolve the financial disputes that previously paralysed northern exports. The Iraq–Turkey pipeline lay dormant for over two years following a March 2023 arbitration ruling in Paris, before operations tentatively resumed last September.

To secure a permanent fiscal framework, energy consultancy Wood Mackenzie is conducting a definitive audit of Kurdish oil production costs on behalf of the federal Ministry of Oil. Under an interim arrangement, any international operator CEO receives an advance of $16 per barrel to cover extraction expenses. These remunerations are settled 100% in physical crude oil allocations rather than cash, a mechanism designed to satisfy federal accounting preferences.

Ali Al-Shatri, director-general of the State Oil Marketing Organisation, said the independent assessment will provide the accurate data required to replace this temporary rate. He recently told Rudaw that the existing agreement has been formally extended until the end of March 2026, granting auditors a stable window to complete their comprehensive financial evaluation.