The Iraqi Federal Supreme Court has judged that the Kurdistan's 2007 oil and gas law on production, revenues and exports is unconstitutional. Consequently, Kurdistan is obliged to deliver the entire oil production from oil fields in the region to the Iraqi federal government. In addition, Iraq has the right to cancel the oil contracts concluded by the Kurdistan Regional Government with external parties countries and companies regarding oil exploration, extraction, export, and sale.
For several years, the Kurdistan Regional Government (KRG) has been engaged in a political fight against the central government over its oil resources. Kurdistan produces an average of 450 kb/d of crude oil, and started to export oil independently in 2013 through the Kirkuk-Ceyhan oil pipeline to Turkey. In August 2021, new negotiations started with the KRG to resolve their long-standing dispute over oil production and marketing and planning that the KRG would hand over 250 kb/month of crude oil production to the Iraqi Government in return for its share of the federal budget (as agreed in December 2020).