Oil flows from Iraq to Türkiye are not expected to resume before October, when President Recep Tayyip Erdoğan will likely visit Baghdad, according to sources, after the trip originally scheduled for August was postponed.
Türkiye suspended Iraq’s 450,000 barrels per day (bpd) of crude oil exports through the Kirkuk-Ceyhan pipeline on March 25 after an arbitration ruling by the International Chamber of Commerce (ICC).
The ICC ordered Ankara to pay Baghdad damages of $1.5 billion over what it said were unauthorized exports by Iraq's Kurdistan Regional Government (KRG) between 2014 and 2018.
In April, Iraq petitioned a U.S. federal court to enforce the ICC arbitration award. A lack of progress on resolving this litigation was one of the reasons behind the postponement of Erdoğan’s August visit, the sources said.
Türkiye, on the other hand, said the ICC had recognized most of Ankara’s demands. The Energy Ministry said the chamber ordered Iraq to compensate Türkiye for several violations concerning the case.
Erdoğan still intends to visit Baghdad and "wants an agreement to be signed," but "so far the concrete steps expected by Iraq have not yet been taken," resulting in slow progress, a senior Turkish official told Reuters.
One of the steps Ankara is seeking is a halt to the U.S. litigation and as a result, Erdoğan’s visit is scheduled for October, the source added.
"Until now we have not received a definite timeline from Ankara on when the Turkish president is expected in Baghdad," another source, an Iraqi Foreign Ministry official, said.
"It could be the end of this month, or more likely in October, depending on the successful development of talks on energy issues which require a longer than expected time due to multiple thorny issues."
Energy officials in Baghdad and Ankara are "having complicated discussions," with the resumption of flows "the most difficult question," an Iraqi oil official with knowledge of the talks said, adding it was "not likely" flows would restart this month.
Türkiye has also sought a compromise to reduce the damages to be paid to Iraq under the ICC arbitration, two Iraqi oil officials close to the talks said.
Iraqi sources have previously said Türkiye wants Iraq to drop a second arbitration case on exports covering the period from 2018 onward.
Meanwhile, a recent Bloomberg News report suggested Türkiye was seeking a compromise over competing demands from Iraq and the KRG over revenue-sharing from oil exports.
The KRG has lost roughly $4 billion since oil flows to Türkiye’s Ceyhan Port through a pipeline were halted, two sources familiar with the matter said.
The sides have meanwhile agreed to finalize pipeline maintenance before resuming oil flow.
Energy and Natural Resources Minister Alparslan Bayraktar said late last month that Türkiye aims to expedite the revival and operation of the Kirkuk-Ceyhan pipeline as soon as possible.
He said maintenance operations were almost complete.