Iraq turned out to be the market where Türkiye managed to increase its exports the most in the first quarter, according to official data that comes ahead of a long-awaited visit by the Turkish president to Baghdad in the coming days.
Iraq is Türkiye's key trade ally in the region although relations have been strained over what Ankara sees as Baghdad's insufficient cooperation in its fight against the PKK terrorist group, as well as a row over oil exports.
Türkiye's goods sales to the country soared by almost $691.5 million (TL 22.48 billion) from January through March, according to data compiled by the Turkish Exporters Assembly (TIM).
That lifted the overall three-month volume to more than $2.7 billion, marking a 33.9% increase from just over $2 billion in exports in the first quarter of 2022.
The increase placed Iraq at the top in the list of nations where Türkiye's exports rose the most in the January-March period, ahead of Romania with over $489 million, the Netherlands with more than $324 million, Italy with $246.4 million and the United States with $241.8 million, according to the TIM.
The data showed sales to Romania and the Netherlands reached $1.9 billion and more than $2 billion, respectively, in the first three months. Exports to Italy and the U.S. totaled $3.1 billion and $3.2 billion.
Iraq ranked the fifth biggest export market in the January-March period. Sales to the country amounted to $9.75 billion last year, a 6.8% year-over-year decrease from $10.46 billion in 2022.
In recent months, top Turkish officials stepped up diplomacy and paid visits to Baghdad, as well as the Kurdistan Regional Government (KRG), a semi-autonomous entity controlling Iraq's north.
High-level meetings came ahead of Erdoğan's expected visit by the end of this month and a potential Turkish offensive against the PKK, which maintains bases in Iraq.
The PKK is not designated a terrorist organization in Iraq. It is listed as a terrorist group by Türkiye, the United States, the United Kingdom and the European Union.
It has a foothold in the northern region, where the central Iraqi government has little influence.
Erdoğan has said that his country is determined to end the PKK's presence in Iraq this summer. Türkiye often launches strikes against targets in the region, which Baghdad has complained is a breach of its sovereignty.
Those strikes have escalated in recent months after PKK attacks on Turkish military bases in northern Iraq in December and January left 21 soldiers dead.
Officials from Iraq and Syria occasionally raise concerns regarding what they call a violation of the sovereignty of their lands, but Türkiye highlights that the counterterrorism operations are within legal boundaries and in line with international agreements over the sovereignty of countries.
Türkiye renewed its counterterrorism campaign in the past decade after a brief lull. In Iraq, it launched the Claw-Sword operation in 2022 to eliminate terrorists hiding in the mountainous regions. The offensive continues with occasional "retaliation" strikes against terrorists engaging in harassment fire or trying to infiltrate into Türkiye.
In its more than 40-year terror campaign against Türkiye, the PKK has been responsible for the deaths of more than 40,000 people, including women, children and infants. Although its activities are significantly reduced within Turkish territories, the group finds shelter in mountainous areas where members hide out in winter and store munitions and survival kits.
Erdoğan's visit is also expected to weigh on the dispute over oil exports from the KRG, which has been a particular sticking point.
The Iraq-Türkiye oil pipeline, which once handled about 0.5% of global oil supply, has been offline since March 2023, when Ankara halted flows following an arbitration ruling by the International Chamber of Commerce (ICC).
The ICC said Ankara should pay Baghdad damages of $1.5 billion over what it said were unauthorized exports by KRG between 2014 and 2018. Türkiye, on the other hand, said the ICC had recognized most of Ankara's demands. Its Energy and Natural Resources Ministry said the chamber ordered Iraq to compensate Türkiye for several violations concerning the case.
About 450,000 barrels per day of crude once flowed through Iraq's northern route via Türkiye, and its closure has led to the loss of roughly $11 billion to $12 billion for Iraq, the Association of the Petroleum Industry of Kurdistan (APIKUR) estimates.
KRG exports flow through a pipeline to Fish-Khabur on the northern Iraqi border, where the oil enters Türkiye and is pumped to the port of Ceyhan on the Mediterranean coast.
Talks on resuming exports have stalled. Last month, Iraq's Oil Ministry said foreign oil firms operating in KRG are partly to blame for the delay in resuming crude exports after failing to submit contracts for revision.
Iraq has also been discussing a vast infrastructure project stretching 1,200 kilometers from the south of the country toward the border with Türkiye.
Pitched as a link between Asia and Europe, the $17 billion Development Road project aims to tie Grand Faw Port, a major commodities port in Iraq's oil-rich south, to the border with Türkiye and then to Europe through a network of railways and highways.
