Iraq's federal and Kurdish regional governments have reached a deal with oil companies to restart crude oil exports through the Iraq–Turkey Crude Oil Pipeline. 

The agreement, which is subject to the Iraqi cabinet's approval, could see the resumption of about 230,000 barrels per day (bpd) of oil exports that have been halted since March 2023.

A technical official familiar with the agreement said pipeline operations would begin Tuesday, with oil flows expected to resume within 48 hours. 

However, one source familiar with the matter told The New Arab news that the deal was not yet done until it is finalised, since such announcements failed to materialise in the past. 

The breakthrough follows months of negotiations and political wrangling between the federal government in Baghdad, the semi-autonomous Kurdistan Regional Government (KRG), and foreign oil firms over contract terms and unpaid debts.

The Iraq–Turkey Crude Oil Pipeline was shut down after the International Chamber of Commerce (ICC) ordered Turkey to pay Iraq $1.5 billion for unauthorised exports by the KRG. 

While Turkey is appealing the ruling, it has stated its readiness to restart the pipeline, pending an agreement between the Iraqi parties.

Under the new arrangement, the KRG would commit to delivering at least 230,000 bpd to Iraq’s state oil marketer, SOMO, while keeping an additional 50,000 bpd for local use. An independent trader will handle sales from Turkey's Ceyhan port, using SOMO's official prices. 

For each barrel sold, $16 will be allocated to an escrow account and distributed proportionally to producers, with the remaining revenue going to SOMO.

However, two major oil producers in the region, Norway's DNO and its partner Genel Energy, have not yet agreed to the terms. 

A source familiar with the negotiations said DNO wants to continue talks on the nearly $300 million the KRG owes for crude deliveries before the shutdown. 

The draft plan also does not specify how or when companies will receive about $1 billion in accumulated unpaid arrears from late 2022 to early 2023. 

The announcement comes as Iraq and Syria consider reviving a long-dormant oil pipeline that would link Iraqi oil fields to the Mediterranean Sea.