As the Iraqi government and operating companies formally announced that KRG oil exports will restart tomorrow, the Iraqi oil minister said initial exports would range between 180,000 and 190,000 barrels per day.

Context: The deal, hailed as a breakthrough after months of deadlock, reflects the Iraqi Prime Minister’s careful balancing of external U.S. pressure, domestic political realities, and post-election considerations. He is seeking to avoid a rupture with both the KDP and potentially the PUK, while portraying the temporary agreement as a major achievement for his cabinet, something no previous prime minister has managed to deliver.

Details: Current oil production in the Kurdistan Region stands at 265,000–272,300 barrels per day, according to the Roonbeen Organization for Oil Transparency. Production levels are expected to remain stable until new drilling begins and additional wells come online.

The deal involves eight foreign companies but notably excludes DNO and Genel Energy, operators of the Tawke and Peshkabir oilfields. Both companies demanded repayment guarantees for outstanding dues, around $300 million owed to DNO alone, out of nearly $1 billion in immediate entitlements claimed by foreign companies from the Kurdistan Region. Production costs have been set at $16 per barrel for production and transportation, to be paid in oil rather than cash.

In separate statements, DNO and Genel said they will continue selling their crude domestically to local buyers at $30 per barrel, outside the framework of the Baghdad–Erbil deal. The Norwegian company DNO’s non-participation in the trilateral agreement comes at a time when, according to analyst Bijan Rahimi, “DNO has just launched a major expansion program in the Tawke and Peshkabir fields to replace equipment damaged during the July drone attacks, followed by plans to drill eight wells in 2026 with the goal of reaching 100,000 barrels per day.”

The arrangement will remain in effect until the end of the year, after which it will be renewed monthly. A permanent deal will depend on the findings of an international consultancy, expected to be the British firm Wood Mackenzie, contracted by the Federal Oil Ministry, to determine production costs per each oilfield. Baghdad has also agreed to put the deal in writing and conceded to company demands that disputes be resolved through the Paris-based international arbitration court rather than Iraqi courts.

The Kurdistan Region’s production capacity is estimated at 300,000–310,000 barrels per day under normal conditions, though reaching the previous peak of 400,000 barrels per day would take significantly longer. Experts caution that “it would be difficult to reach that level in less than two years.”

Runbeen forecasts that by year’s end, production could increase from three fields, raising overall output to 310,000 barrels per day. Tawke’s output may rise if its early production unit is repaired, while Sarsang could expand significantly to 30,000–35,000 barrels per day.