The deal comes 48 hours after Baghdad and several other OPEC members announced a drastic cut in oil production as early as May. A decision that caused oil prices to jump.

While the Iraqi government is betting on a barrel at 70 dollars on average to top up its budget in the next three years, the Kurdish oil issue continued to poison its relations with Erbil.

Baghdad was very irritated to see the autonomous region go it alone by exporting its oil to the Turkish port of Ceyhan without receiving dividends.

The agreement was signed in Baghdad in the presence of Iraqi Prime Minister Mohamed Chia al-Sudani and Kurdish Prime Minister Masrour Barzani.

It forecasts the resumption of Kurdish oil exports to Ceyhan "today" (Tuesday), according to an Iraqi Kurdish official.

The sales of Kurdish oil will henceforth pass into the hands of the Iraqi State Oil Company (Somo), and no longer exclusively by the authorities of Iraqi Kurdistan, said an Iraqi government official and an Iraqi Kurdish source on condition of anonymity.

In addition, Kurdish export revenues will be paid into an account managed by Erbil and supervised by Baghdad.

-'Vital step'-

This agreement is "temporary", stressed Mr Barzani on Twitter, because it will make it possible to hold until the vote by the Iraqi Parliament of a framework law on oil and gas: "But it is a vital step to put an end to the long dispute between Erbil and Baghdad".

The "dispute" went beyond Iraq's borders ten days ago, when Turkey stopped importing oil from Iraqi © Kurdistan KARIM SAHIB / AFP/Archives

The "dispute" went beyond Iraq's borders ten days ago, when Turkey stopped importing oil from Iraqi Kurdistan.

The arbitral tribunal of the International Chamber of Commerce in Paris had previously ruled that the Iraqi government was right to want to be the manager.

In 2014, Baghdad filed a lawsuit against its Turkish neighbour with this court, following Ankara's announcement to import oil from Iraqi Kurdistan to transport it to Ceyhan.

Ignoring the opposition of the federal government, Erbil began exporting to Turkey. Today, these exports amount to about 450,000 barrels per day (bpd).

-"Salty discounts"-

The agreement will "give Baghdad the opportunity to finally be involved in the oil sector of Iraqi Kurdistan, even if it is for the moment only the sales aspect," Yesar al-Maleki, Gulf analyst at the Middle East Economic Survey (MEES), told AFP.

For its part, "Erbil will also be able to increase its income by stopping granting steep reductions" on its prices, he adds.

Oil is the cornucopia of both Baghdad and Erbil. Iraq, the second largest OPEC country, exports an average of 3.3 million barrels of crude per day. And crude oil accounts for 90% of its revenues.

This is also why the rivalry between the two entities is so bitter.

In theory, Erbil should send part of its oil production to Baghdad for marketing. In return, the federal government should pay the salaries of Kurdish civil servants.

But Erbil has never sent its oil and complains of chronic delays in the payment of benefits.

Iraq joined forces with several other producing countries to announce on Sunday a reduction of 211,000 barrels per day in its production from May © SAFIN HAMED / AFP / Archives

A pillar of OPEC, Iraq has joined forces with several other producing countries, such as Saudi Arabia, Kuwait and the Emirates to announce Sunday a reduction of 211,000 barrels per day of its production from May.

Analysts observe that these "voluntary adjustments" are intended to boost prices after a recent fall.

© 2023 AFP