Baghdad sues Iraqi Kurds over US deals

The Iraqi federal government’s oil ministry has sued the semi-autonomous Kurdistan Region of Iraq over oil and gas contracts it signed with US firms, three sources with direct knowledge of the matter said and a document showed.

The legal challenge is the latest obstacle to the resumption of flows through the Iraq-Turkey oil pipeline that have been halted since March 2023, despite pressure by the administration of US President Donald Trump.

Baghdad has said direct engagement between companies and the Kurdistan regional government, or KRG, without the federal government’s inclusion violates the constitution, calling the deals null and void.

The KRG has defended the agreements, saying they were based on existing contracts.

A speedy resumption of exports from Iraq’s Kurdistan region would help to offset any fall in Iranian oil exports, which Washington has pledged to cut to zero as part of Trump’s “maximum pressure” campaign against Tehran.

Iraq, an ally to both the United States and Iran, is wary of being caught up in Trump’s policy to squeeze Tehran.

Masrour Barzani, the prime minister of the KRG, oversaw the signing of two energy agreements worth a combined $110 billion over their lifetimes with US companies HKN Energy and WesternZagros during his trip to Washington DC last week.

He met with US Secretary of State Marco Rubio on Friday and discussed the need to resume oil exports from Kuridstan through the Iraqi Turkish pipeline, a KRG statement said.

Reuters has contacted the U.S. companies, but has not yet received a response.

“The timing of the gas deals is particularly significant, considering Iran’s weakening position and Washington’s ongoing pressure on Baghdad to reduce reliance on Iranian gas imports,” Iraqi energy analyst and a former manager at the state-run North Oil Co. Ali al-Obeidi, said.

The agreements involve the development of the Miran and Topkhana-Kurdamir gas fields in the northern Iraqi city of Sulaimaniya.

The three sources spoke on condition of anonymity because they were not authorised to speak publicly about Iraq’s legal action.

Flows through the pipeline were halted after the Paris-based International Chamber of Commerce ruled that Turkey violated provisions of a 1973 treaty by facilitating Kurdish exports without Baghdad’s consent.

Reuters