KEY POINTS
- Turkey wants the Iraq-Turkey oil pipeline to operate at full capacity.
- Oil firms in Iraq’s Kurdistan region are hesitant to resume exports.
- A new trade route project could expand oil export options for Iraq.
Turkey is pushing for the Iraq-Turkey oil pipeline to operate at full capacity once oil flows resume through the Ceyhan port, according to Turkish Energy Minister Alparslan Bayraktar.
The pipeline, which has remained inactive since March 2023, is seen as a crucial route for transporting oil from Iraq’s Kurdistan region.
Turkey halted operations following an International Chamber of Commerce (ICC) ruling that ordered Ankara to pay Baghdad $1.5 billion in damages for unauthorized oil exports between 2014 and 2018.
Despite Turkey signaling its readiness to resume operations in late 2023, Ankara has yet to receive official confirmation from Iraq.
Meanwhile, eight international oil companies operating in Iraq’s Kurdistan region have refused to restart exports through Ceyhan, despite an earlier announcement from Baghdad stating that resumption was imminent.
Disputes delay progress on oil transportation
Bayraktar emphasized that Turkey has been prepared for 1.5 years to restore the pipeline’s operations. “This pipeline has been ready for a long time,” he stated.
“We want both of the 650-kilometer pipelines from Silopi to Ceyhan to be used efficiently.”
He further explained that Turkey wants some of the transported oil to be directed to a refinery in Kirikkale, while another portion will be shipped via Ceyhan to refineries in Turkey and international markets.
According to Reuters, the aim is to fully utilize the pipeline’s capacity, ensuring a steady flow of crude oil.
However, ongoing legal and political hurdles continue to delay progress.
While Baghdad has expressed willingness to restart exports, oil companies remain hesitant, citing concerns over agreements and revenue-sharing disputes between Iraq’s federal government and the Kurdistan Regional Government (KRG).
New trade route project to boost oil exports
As part of its broader strategy, Turkey is working on a Development Road Project, a trade route initiative involving Iraq. This project includes constructing a pipeline that extends to the Persian Gulf, allowing Iraqi oil exports to reach global markets via Turkey.
The project is expected to provide an alternative route for crude oil, increasing Turkey’s role as a key transit hub for energy exports.
However, geopolitical complexities and economic negotiations between Iraq, Turkey, and oil firms will determine the future of these ambitious plans.
As discussions continue, Turkey remains eager to restore oil exports through the Iraq-Turkey pipeline, maximizing its capacity and ensuring a stable energy partnership with Iraq.
