The United States Diplomacy Breakthrough in the Resumption of Kurdish Oil Export

By Issa Chomani:

Washington, DC

Feb 27, 2026, marks Five months since the resumption of the Kurdistan Regional Government’s oil exports through the Iraq–Turkey pipeline. Iraq’s oil minister, Hayyan Abdul Ghani on Feb 25 said, “Kurdistan Region exports currently range between 200,000 and 210,000 barrels per day.” According to Iraq’s state oil marketing company, SOMO, over the first three months, the company exported about 19 million barrels of crude oil from the Kurdistan Region, confirming the continuation of oil deliveries under the existing agreement between Baghdad and Erbil, mediated by the United States. The agreement which was expiring on Dec 31, 2025, extended to March 30, 2026. According to Erbil and Baghdad officials as well international oil companies (IOCs), it may further extend until a consultant company is hired for a more accurate cost assessment in each oil field which is now $16 US dollars per barrel.

On September 27, 2025, Kurdish oil exports resumed to Turkey’s Ceyhan port after a temporary halt imposed by the Iraqi Federal Government (IG). This suspension followed a decision dated on March 25, 2023, by the International Chamber of Commerce in Paris, France, which decided in favor of the IG, indicating that Turkey had violated the ‘1973 treaty’ by permitting the Iraqi Kurdistan Region (IKR) to independently export its oil through Iraq–Turkey pipeline, and this is against the clauses of the treaty.

For more than two years, the international oil companies operating in the Kurdistan Region were unable to export the crude oil produced from the region’s oilfields. According to the Association of the Petroleum Industry of Kurdistan (APIKUR), which represents eight international oil companies in the IKR, these companies were producing 350,000 to 400,000 barrels per day (bbl/day) before the export halt.

It is worth mentioning that three of the international oil companies, including HKN, Hunt Oil, and WesternZagros, out of APIKUR’s eight members, are American oil and gas companies. The companies have been operating in the Kurdistan Region for over a decade. In the early 2000s, after the US-led military campaign in Iraq, some American hydrocarbon companies entered Kurdistan’s market to invest in the region’s oil sector. Notably, their involvement paved the way for other international oil companies to enter the region to invest in its oil sector.
In this paper, I shed light on the role of US diplomacy to facilitate the breakthrough that eventually led to the resumption of Kurdish oil exports through the Iraq–Turkey pipeline. Also, I argue that without the US pressure on Baghdad, the IG would not have reached an agreement to address the concerns of international oil companies (IOCs).

Many US oil companies operating and investing in the Kurdistan Region’s rich natural resources sector helped to have Congress and the Administration exert a clear pressure on Baghdad to reach an agreement with IOCs and the Kurdistan Regional Government (KRG) to resume the region’s 500,000 barrels of oil return to the global oil markets. It is clear that the US energy companies lobbied members of the Congress to encourage Washington to intervene directly with Baghdad and Erbil, with the hope that the US officials would utilize their power over the Iraqi government to push for compromise.

The United States officials have repeatedly encouraged American oil companies to invest in Iraq and Kurdistan Region’s energy sector to strengthen economic stability and support US’s energy policy to ensure a steady supply to global markets. Reportedly, the US companies have invested billions of dollars in Kurdistan’s oilfields. For the US government, while these companies make a significant financial gain, they reinforce both economic and mutual strategic interests.

Kurdistan region’s oil export halt

Oil exports from the Kurdistan Region through the Iraq-Türkiye pipeline were suspended in March 2023 after an arbitration court ruled that Ankara had breached a 1973 agreement by enabling independent Kurdish exports since 2014 (ICC 2023). The halt ended independent oil sales from Erbil, which had long been a point of contention with Baghdad. On March 25, the International Chamber of Commerce’s International Court of Arbitration (ICC-ICA), which temporarily suspended the export of Kurdish oil through the Iraq-Turkey Pipeline (ITP), the pipeline exports oil from northern Iraq, including the Kurdistan Region, to the Turkish port of Ceyhan.

The shutdown had deep economic consequences for the region — the pause disrupted roughly 450,000 barrels per day that had been flowing through the pipeline, equivalent to about 0.5 % of global oil supply at the time ( Rasheed 2023). As a result, the export halt dealt a heavy blow to Kurdish revenues: according to regional sources, the suspension caused losses worth billions of dollars, triggering fiscal strain in Erbil (Edwards 2023).

US Interests in Kurdistan’s energy sector

In May 2025, during a visit to Washington, DC, KRG’s Prime Minister Masrour Barzani signed two multi-billion-dollar ($110) contracts with two US energy companies, HKN and WesternZagros, to invest in two gas fields. The ceremony was attended by the US Secretary of Energy, businessmen, and public figures. The projects’ goal is to produce natural gas as well as condensate from the Miran gas field and Topkhana-Kurdamir blocks. The life span of the projects is estimated to be 50 years (HKN Energy 2025, WesternZagroz 2025).

In a daily briefing, the US Department of State commented on these energy contracts, labeling them as a cornerstone to enhance the economic relations between Washington and Erbil. State Department principal, Tammy Bruch, stated “the United States supports economic deals that benefit all Iraqis, including the two announced last week. We encourage Baghdad and Erbil to work together to expand domestic gas production as soon as possible. These types of economic partnerships will benefit both the American and Iraqi peoples, and help Iraq move toward energy independence. U.S. oil companies have invested billions of dollars in the Iraqi Kurdistan Region’s oil sector. We hope to see additional investment from U.S. oil companies throughout Iraq.” (Bruce 2025).

While Baghdad considered such two contracts are against the Iraqi constitution, the spokesperson said the United States expects such deals to continue and to be facilitated, underscoring the importance of a strong and resilient IKR within a sovereign federal Iraq. Tammy Bruce repeated her government’s official stance, stating “the Secretary commended the prime minister for finalizing deals with U.S. companies to expand natural gas production in the IKR, which will help Iraq move toward energy independence.”

Reportedly, the two multi-billion-dollar energy projects are not the only investments made by US companies in Kurdistan; US oil firms also maintain an important presence in the region’s energy infrastructure. Data from the Ministry of Natural Resources of the KRG indicate that the first oil companies to begin operations in the region were US’s, including HKN, HuntOil,
Chevron, ExxonMobil, and Weatherford, among few others. American companies collectively invested billions of dollars in Kurdistan’s oil sector. WesternZagros, HuntOil, and HKN alone have invested more than $5 billion in the northern part of Iraq (Noam 2025).

From 2007 to 2025, HKN mainly invested in oilfields in the Kurdistan region. However, a strong interest shown by the US investor also led the company to enter the natural gas sector. The HKN acquired a license for an estimated 8 trillion standard cubic feet (scf) of proven natural gas at the Miran gas field. HKN’s CEO, Russell Freeman, expressed, “the agreement paves the way for the phased development of the field, with the possibility to generate over $40 billion in long-term value. This agreement marks a significant milestone not only for our company, but for the energy future of the region.” HKN Energy, in partnership with ONEX, implemented the project, which is considered one of the Kurdistan region’s strategic gas resources (HKN 2025).

Another US-based energy firm, WesternZagroz that has been operating in the Kurdistan region of Iraq since 2005 in exploration and production of crude oil, successfully secured a multibillion dollar project in a gasfield in the KRG in 2025 which is a resources-rich Topkhana-Kurdamir block. The project aims to provide natural gas to produce electricity to millions of homes as well as industry in the region (WesternZagroz 2025).

The signing ceremony was held in Washington, DC. The event was attended by US Secretary of Energy, KRG Prime Minister, WesternZagroz Chairman. According to WesternZagroz, the combined Topkhana-Kurdamir block holds a resource potential of up to 5 trillion standard cubic feet of gas, and an estimated 900 million barrels of recoverable crude oil. This acquisition, through a phased development approach, is expected to generate an estimated $70 billion of revenue over the life of the project. Toufic Chahine, Chairman of WesternZagros stated “the agreement also serves as a model for commercial collaboration between American energy companies and the KRG, with the support of the US Government.” The chairman added that “we look forward to our partnership with the Kurdistan Regional Government, contributing to the bright energy future of the Region.” (Kurdistan24 2025). The company emphasized that this development is seen as a milestone to improve US-KRG relations and further motivate US oil companies to invest in KRI.

The agreements that were signed soon after Donald Trump returned to office in his administration, were emphasized by people from both U.S. energy firms as having full US support, and the deals marked the major American energy investment in Iraqi Kurdistan.

The previous US investment in the KRI’s energy sector was solely in oil, rather than gas. Regarding the development of gas in Kurdistan and the potential for its existing power infrastructure to produce electricity for its neighbors, US Energy Secretary Chris Wright said, “this is fantastic. This is very aligned with President Trump’s agenda”, and signaled that the administration would continue to pursue energy investments in the country’s northern autonomous region in order to help develop its untapped resources (Almonitor 2025).

The US energy policy

The Trump administration’s energy policy aimed to supply as much oil as possible to global markets. The administration repeatedly criticized the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, for reducing production rates to stabilize oil prices. The Kurdistan Region’s total production is approximately 500,000 barrels per day, representing roughly 0.5% of the world’s daily oil production. Being relatively modest, this volume could still influence global oil prices. Energy analysts agree that such production could help stabilize global oil markets, particularly amid Washington’s “Maximum Pressure” campaign to curtail Iranian oil exports and limit Russia’s oil revenues, which serve as a key source of funding for its military operations in Ukraine.

However, the closure of the Iraq–Turkey pipeline from March 2023 to September 2025 deprived global markets of nearly 500,000 barrels of oil, running counter to US political and commercial interests and contributing to market uncertainty. The Association of the Petroleum Industry of Kurdistan (APIKUR) estimated that Iraq, including Kurdistan, and the eight members of APIKUR lost more than $35 billion in revenue due to the pipeline shutdown (APIKUR 2025).

US Energy Secretary Chris Wright signaled the administration would continue to pursue energy investments in the country’s northern autonomous region in order to help develop its untapped resources. “We are very keen to work with and support the people of the Kurdistan region to turn their endowments underground into resources,” Wright told an audience at an Al-Monitor Global Institute event in Washington on Thursday.

“I see great opportunity for American cooperation there, as evidenced by the signing of these two deals, and we would love to see that commercial relationship grow and flourish the oil production in the region, and very exciting projects in natural gas that can help electricity generation in the Kurdish region,” Wright said. (Al-Monitor 2025).

$250 million commitment from the US Development Finance Corporation The US government also provided loans to non-US companies to invest in the Kurdistan Region’s oil and gas sector. Crescent Petroleum CEO Majid Jafar in an interview with Rudaw TV highlighted the importance of this loan by the US government. According to Jafar, in 2018, the US Development Finance Corporation committed $250 million to Pear Petroleum, a consortium that includes UAE-based companies Dana Gas and Crescent Petroleum, as well as European companies RWE from Germany, OMV from Austria, and MOL from Hungary (Rudaw 2025). The purpose of the loan was to expand their investment to help Iraq and Kurdistan rely on their own energy resources and reduce dependence on Iranian-imported gas for electricity production.

US Threats

From mid-2025 through late October, Kurdistan Region oil and gas infrastructure came under a sustained wave of attacks, heightening a reaction from Washington to pressure on Baghdad and reshaping U.S. leverage over Iraq’s energy policy. Several of the strikes targeted sites linked to U.S. investment, including facilities operated by HKN Energy at the Sarsang block. Although the government of Iraq announced investigations, it did not officially identify the perpetrators. Public opinion domestically as well as externally , however, widely blamed Iran-backed militias, reinforcing long-standing U.S. concerns about militia influence and the safety of American economic interests.

The attacks provoked a strong reaction from the Trump administration. The U.S. State Department issued repeated condemnations, calling on Baghdad to protect civilian and energy infrastructures, investigate the attacks, and bring those responsible to justice. Lawmakers on Capitol Hill echoed those demands, arguing that continued impunity for attacks on U.S. companies undermined Iraq’s investment climate and its relationship with Washington.

Against this backdrop, the United States sharply increased pressure on Baghdad to reopen the long-shuttered Iraq–Turkey pipeline, a key route for exporting Kurdish crude to
international markets. According to multiple sources talked to Reuters, U.S. officials warned Iraqi leaders that failure to resume oil flows through Turkey could trigger American sanctions. The message linked security, energy, and economic policy: protecting U.S. investments and restoring exports were framed as inseparable from Iraq’s broader relationship with Washington.
The threat of sanctions marked a significant escalation, signaling that the U.S. was prepared to use financial and diplomatic pressure to break the political deadlock between Baghdad, Erbil, and oil companies. It also underscored Washington’s growing influence in Iraq, as energy security and the resumption of Kurdish oil exports became central tools in countering militia violence and stabilizing Iraq’s economy.

US Brokered a Deal to Resume KRI’s Oil through Pipeline Between March 2023 to Sep 2025, the US oil firms which operate in the Iraqi Kurdistan oil sector lobbied in the Congress to warn the US administration to exert pressure on Baghdad to open the pipeline. Several US lawmakers during the Biden administration wrote letters to Secretary of State Antony Blinken to use White House leverage over Baghdad. Despite US engagement with Baghdad, Erbil and Ankara, the Iraqi government did not open the pipeline. However, the lobby by US oil companies continued when Trump took office (Atencio 2023, Atencio 2023). Between 2023 to 2024, in nine separate letters to the US members of Congress, APIKUR demanded pressure on the US government to engage in the talks between Erbil and Baghdad. In one of the letters, APIKUR wrote to Mike Rogers, Chairman United States House Committee on Armed Services and Adam Smith, Ranking Member United States House Committee on Armed Services “We request your immediate assistance to persuade the Federal Government of Iraq (GoI) to promptly resolve issues that have resulted in the halt of greater than 400,000 barrels a day of crude oil exports from the KRI to global markets.”

Michael Waltz, who served as congressmen, and who also co-chairs the congressional Kurdish caucus, called on the Biden administration to exert strong pressures on Iraq to get KRG oil moving again. Waltz, with some colleagues in Congress, wrote a letter to President Biden’s secretary of State where he noted that; the U.S. has significant leverage in Baghdad, if it decides to use it (Mylroie, 2023).

During the Second Trump Administration, Waltz became National Security Advisor. Soon after taking office, Waltz called the Iraqi prime minister, Mohammad Shia’ Al-sudani. According to a read out he raised the issue of resuming Kurdish oil exports through the Iraq-Turkey pipeline and stressed the need to re-open the pipeline (Kurdistan24 2025).
The readout also included that the US National Security Advisor urged Sudani to have his government “work with the Kurdistan Regional Government to address remaining contract disputes and pay arrears owed to U.S. energy companies,”

As the US companies continued their demand from Washington to put further pressure on Sudani’s government, it seemed that the Trump administration took it seriously (Rasheed 2025). US Secretary of State, Marco Rubio in a call with the Iraqi prime minister stressed that it is in the interest of all sides to re-open the Iraq-Turkey pipeline in order to flow the Kurdish oil to international markets. The State Department published the detail of the call as quoting:

“The two agreed on the need for Iraq to become energy independent, to quickly reopen the Iraq-Türkiye Pipeline, and to honor contractual terms for U.S. companies working in Iraq to attract additional investment.”( State Department, 2025). In an announcement the APIKUR welcomed Secretary Rubio’s efforts and direct engagement with Baghdad and Erbil, “Association of the Petroleum Industry of Kurdistan (APIKUR) applauds U.S. Secretary of State Marco Rubio’s efforts to restart oil exports from the Kurdistan Region of Iraq, including in a call with Iraqi Prime Minister Mohammed Shia al-Sudani on February 25, 2025.” ( Caggins, 2025).

Although the Iraqi officials including the ministry of oil repeatedly announced that the issue of Kurdistan’s oil export has been resolved and set different dates to resume the oil, technical disputes between oil companies, Baghdad and Erbil remained the main obstacle to open the resume exploring oil for some time (El Dahan 2025). In Sep 2025, some hundred thousand barrels started flowing through the Iraq-Turkey pipeline.

US officials welcomed the agreement that they themselves initiated the tripartite agreement between the IOCs, KRG and Federal government of Iraq. Marco Rubio in a post on “X” wrote: “We welcome the announcement that the Government of Iraq has reached agreement with the Kurdistan Regional Government (KRG) and international [oil] companies to reopen the [Iraq-Turkey] pipeline, a deal facilitated by the United States that will bring tangible benefits for both Americans and Iraqis,”

Persistent U.S. diplomacy helped Erbil and Baghdad to resolve their standoff. Through commercial diplomacy, President Donald J. Trump’s administration pressed Kurdish and Iraqi leaders to accept a compromise deal that protected Erbil’s basic financial and energy rights while honoring Baghdad’s long-standing quest for sovereignty over oil sales (Saeed 2025).
It is significant to report that days before the Kurdish oil export resume, Reuters revealed that the United States intensified its efforts to push Iraq into resuming Kurdish oil exports, warning Baghdad that failure to do so could result in sanctions (Reuters 2025).

Conclusion

The events regarding Kurdish oil exports via the Iraq–Turkey pipeline highlight the strategic significance of the energy resources in the Kurdistan Region for regional stability and international energy markets. The halt of exports from March 2023 to September 2025, after the International Chamber of Commerce determined that Ankara violated the 1973 agreement, showed how political conflicts among Baghdad, Erbil, and global players can result in immediate economic impacts. The shutdown impacted worldwide markets by nearly 500,000 barrels of oil daily, this led to instability in the energy sector and caused an estimated revenue decline of more than $35 billion for Iraq, including the Kurdistan Region, as well as the international oil firms operating in Iraq.

Even though this output constitutes merely around 0.5% of the total daily global production, it still makes a significant impact, especially within the framework of the larger U.S. energy policy, which includes the “Maximum Pressure” initiative aimed at disrupting oil revenues from both Iran and Russia.

The participation of the U.S. was crucial for the eventual restart of exports. U.S. energy companies, such as HKN, HuntOil, and WesternZagros, have poured billions into the Kurdistan Region in the last twenty years, starting with oil and subsequently branching out into gas. These investments, backed diplomatically and financially by the U.S. government, showcase the connection between private-sector interests and foreign policy. Loans and commitments from entities such as the U.S. Development Finance Corporation have also advanced energy development that supported initiatives like HKN’s Miran gas field and WesternZagros’s Topkhana-Kurdamir block. These initiatives enhance the region’s energy framework while also fostering greater economic stability and energy autonomy for Iraq and the Kurdistan Region.

The energy policy of the Trump administration, which focused on maximizing oil availability in global markets and condemned production limits imposed by OPEC+, matched these commercial and strategic goals. U.S. diplomatic influence on Baghdad and support for American energy companies played an important role in restarting the pipeline that allowed almost half a million barrels of Kurdish oil to flow into the markets.

Finally, the restart of Kurdish oil exports signifies the alignment of geopolitical dynamics, economic motives, and energy strategies. It emphasizes the necessity of continued global collaboration and funding to secure dependable energy supplies, reduce market fluctuations, as well as foster long-term growth in the Kurdistan Region. The experience highlights how strategic involvement by global powers can assist in balancing regional conflicts while promoting both economic and political goals.

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