A year after Iraq-Turkey pipeline halt, no progress to resume flows
Three sources told Reuters that a year after the Iraq-Turkey oil pipeline was shut down, the conduit-which had supplied around 0.5% of the world’s oil-remains in limbo due to obstacles related to money and legality.
The Association of the Petroleum Industry of Kurdistan (APIKUR) believes that the shutdown of Iraq’s northern oil export route via Turkey has cost the country between $11 billion and $12 billion. Previously, some 450,000 barrels of crude oil were exported daily through this route.
Reuters was informed by one of the people with knowledge of the situation that a restart is not currently being explored.
Ankara halted flows on March 25, 2023, after an arbitration ruling found it had violated provisions of a 1973 treaty by facilitating oil exports from the semi-autonomous region of Kurdistan without the consent of the Iraqi federal government in Baghdad.
The court ordered Ankara to pay Baghdad $1.5 billion in damages for unauthorised exports between 2014 and 2018. A second ongoing arbitration case covers the period from 2018 onwards. The countries remain embroiled in a protracted legal tussle, two sources familiar with litigation said.
Meanwhile, Iraq owes Turkey minimum payments as long as the pipeline is technically operational – estimated by consultancy Wood Mackenzie at around $25 million per month – as part of the treaty, in theory providing an incentive to restart flows.
