Turkey will seek a new deal with Iraq on an oil export pipeline between the two countries that’s been idled for more than two years in a payment dispute.
Ankara is unhappy with the underutilization of the pipeline under the current deal and sees greater potential benefit for itself and Iraq from a new arrangement, according to a senior Turkish official with direct knowledge of the matter, who asked not to be identified because of the sensitivity of the matter.
A decree in Turkey’s Official Gazette said a 1973 agreement governing the route would be “terminated” on July 27, 2026, together with all subsequent associated accords.
The potential renegotiation is the latest step in the saga that started in March 2023, when Turkey closed the link after an arbitration court ordered the country to pay Iraq $1.5 billion over unauthorized exports. Numerous attempts to restart shipments have since failed – including due to disagreements between Iraq, its semi-autonomous Kurdistan region and companies operating in the area.
But last week, Iraq’s federal and regional administrations agreed to an oil-transfer plan in a move toward resumption. Still, contracts with companies in the Kurdish region are yet to be signed. It wasn’t immediately clear if Turkey’s renegotiations would be another hurdle to a restart.
Iraq’s oil ministry and the state oil-marketing company, SOMO, didn’t immediately respond to a request for comment on Turkey’s announcement about ending the agreement.
In a letter to Iraq’s oil ministry, the Turkish energy ministry expressed its willingness to renew the pipeline deal, state-run Iraqi News Agency reported, citing an unidentified source at the Baghdad-based ministry.
Turkey sent its neighbor a draft for a new, more comprehensive energy cooperation agreement which spans oil, gas, petrochemical industries and electricity. The Iraqi oil ministry will negotiate with Turkish authorities over the proposed deal, according to the report.
The link was transporting about 500,000 barrels a day of oil when it was halted in 2023. At full capacity, its two constituent lines can move a combined 1.5 million barrels per day, according to the website of Turkey’s state pipeline operator Botas. The bulk of Iraqi oil production is exported through ports in the country’s south.
The Turkish official also highlighted the link’s importance to the proposed Development Road project, an infrastructure initiative designed to link Iraq to Europe via Turkey that Ankara has previously said could feed refinery and petrochemical investments in Ceyhan, which is the end point of the pipeline from Iraq.
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