ERBIL, Kurdistan Region of Iraq - The Kurdistan Regional Government (KRG) on Wednesday emphasized that they will continue dialogue with the Iraqi federal government to constitutionally resolve outstanding issues in the energy sector.

Kurdistan Region Prime Minister Masrour Barzani chaired a session of the Council of Ministers on Wednesday - the first following his return from his official visit to the United States.

The Kurdish premier briefed the cabinet on the outcomes of the visit, pointing out the importance of the recently-inked energy deals, as well as the significance of the overwhelming support the KRG delegation received in Washington.

Barzani last week oversaw the signing of two agreements in Washington DC, one with HKN Energy and ONEX Group, and another with WesternZagros. The deals have a combined value of around $110 billion, and aim to boost the Kurdistan Region’s energy sector.

“These two agreements will benefit the Kurdistan Region and all Iraqi people,” a statement from the KRG cited the prime minister as saying.

US officials collectively stressed that the recent deals benefit the whole of Iraq, not just the Kurdistan Region, and voiced support for the agreements during Prime Minister Barzani’s meetings in Washington.

The Council of Ministers welcomed Washington’s position and support for “the constitutional structure of the Kurdistan Region and ensuring the exercise of the powers and characteristics of the Kurdistan Region within the framework of the constitution,” according to the KRG statement.

The Iraqi oil ministry has rejected the recent agreements, claiming that the procedures violate a 2022 Iraqi federal court ruling prohibiting Iraqi regions and provinces from regulating trade policy with other countries. The KRG’s natural resources ministry has responded to Baghdad’s comments, stating that the agreements are constitutionally valid and have been previously approved by Iraqi courts.

“The Council of Ministers stressed that the Kurdistan Region will continue its ongoing dialogue with the federal government to resolve outstanding issues within the framework of the constitution, especially the resumption of oil exports through SOMO [State Organization for the Marketing of Oil], which will play an important role in increasing federal budget revenue,” the statement added.

Exports of the Kurdistan Region’s oil through the Turkish Ceyhan pipeline, where part of Kirkuk’s oil was also exported, were halted in March 2023 after Ankara lost a case against Baghdad in a Paris-based arbitration court. The case accused Ankara of breaching a 1973 agreement by allowing Erbil to start selling oil independently of Baghdad.

Baghdad and Erbil announced in late February that they reached an agreement to resume the Kurdistan Region’s oil exports to the international market, but the process has yet to restart, with international oil producers demanding payment surety, transparent implementation of Iraq’s budget law stipulations, and resolution of payments that are in arrears before resuming the work.

The halt in exports has dealt a major blow to Iraq and the Kurdistan Region's economy, with tens of billions of dollars in lost revenue to date.