Iraq restarts oil exports through Türkiye-Iraq pipeline

Iraq’s Minister of Oil Hayyan Abdul-Ghani announced that Iraq would resume its oil exports through the Ceyhan Port via the Türkiye-Iraq oil pipeline.

This announcement marks a significant step toward reviving the pipeline that has been inactive due to a dispute between Baghdad and Irbil since March 2023.

The initial export will begin at 185,000 barrels per day, with plans to gradually increase the flow to meet the federal budget’s expectations.

Why it matters

The resumption of oil exports from Iraq through the Ceyhan Port is a key development for both Iraq and Türkiye. The halt in exports, caused by the political disagreement between the federal government in Baghdad and the Kurdish Regional Government (KRG) in Irbil, has resulted in substantial economic losses, approximately $20 billion. The renewed flow of oil could contribute to improving relations between the central government in Baghdad and the KRG, as well as restoring significant economic activity for both countries.

Key details of announcement

• Restart of exports: Iraq plans to restart oil exports through the Ceyhan Port with an initial export of 185,000 barrels per day, which will gradually increase as the production capacity reaches federal budget goals.
• Dispute resolution: The oil flow was halted in March 2023 due to a dispute between Baghdad and Irbil, but the situation appears to be moving toward resolution.
• KRG’s role: A recent agreement within the Iraqi Parliament involves subsidizing production costs for international oil companies operating in the Kurdish region, facilitating smoother oil transport and export.
• Provisions and procedures: Iraq’s Oil Ministry and the KRG have been working to ensure that oil from the Kurdish region is delivered to the State Oil Marketing Organization (SOMO) for export via Türkiye.
• Technical review of the pipeline: Both the KRG and Iraq have agreed to conduct joint technical reviews of the pipeline infrastructure to ensure it is ready for operation.

US and Russian Support

• U.S. diplomacy: On Feb. 26, U.S. Secretary of State Marco Rubio and Iraqi Prime Minister Mohammed Shia al-Sudani discussed accelerating the reopening of the Türkiye-Iraq oil pipeline.
• Role of foreign companies: Both U.S. and Russian companies are playing an active role in the process, particularly in overcoming technical and financial obstacles. KRG President Nechirvan Barzani emphasized the support from the U.S. in facilitating the resumption of oil exports.

Economic impact of suspension

• Losses due to suspension: The halt of oil exports has caused a significant financial loss of approximately $20 billion in revenue for the region.
• Anticipation of resumption: The resumption of exports is expected to improve relations between Baghdad and Türkiye, as well as stabilize the regional economy. Turkish Energy Minister Alparslan Bayraktar stated that the pipeline had been ready for operation since October 2023, but the delay was due to unresolved political disagreements between Irbil and Baghdad.

US pressure on Iraq

Experts, including Kate Dourian from the Washington Institute for Near East Policy, suggest that the decision to restart exports may be influenced by U.S. pressure under former President Trump’s administration, which had emphasized the need to continue oil exports from the Kurdish region to avoid potential U.S. sanctions.

The Trump administration had warned that failure to do so could lead to economic consequences, especially in relation to U.S. maximum pressure policies on Iran.