A long-awaited resumption of oil shipments through the Iraq-Türkiye pipeline is expected to strengthen Türkiye’s energy supply and add diversity to global markets, experts opined, although also emphasizing that it shows more about energy geopolitics.
Crude oil flowed on Saturday through a pipeline from the semi-autonomous region in northern Iraq to Türkiye for the first time in 2-1/2 years, Turkish and Iraqi officials said.
Energy and Natural Resources Minister Alparslan Bayraktar said on Saturday that flows resumed at 7:07 a.m. local time (4:07 a.m. GMT) through the pipeline, which had been shut since Feb. 6, 2023, and damaged by earthquakes but was declared operational by the Turkish state energy company BOTAŞ in October of that year.
The twin-line pipeline, with a combined capacity of about 1.5 million barrels per day (bpd), connects oil fields in Iraq, including those in Iraq's Kurdish Regional Government (KRG), to the Mediterranean export terminal at the Turkish port of Ceyhan.
Iraq’s Oil Ministry said crude produced in the region would be delivered to Iraq's State Organization for Marketing of Oil (SOMO) and exported via Ceyhan under an agreement with the KRG and producing companies. Initial shipments are expected to average approximately 200,000 barrels per day (bpd).
Bayraktar had told Anadolu Agency (AA) in July that if the pipeline returns to full capacity, Iraq could send up to 40% of its roughly 4 million bpd of exports through Türkiye, creating as much as $40 billion in annual trade potential.
The resumption was stalled amid issues related to payments between the KRG and the central government.
The U.S. had pushed for a restart, which is expected to eventually bring up to 230,000 bpd of crude back to international markets at a time when the OPEC+ bloc is boosting output to gain market share.
Iraq's delegate to the Organisation of the Petroleum Exporting Countries (OPEC), Mohammed al-Najjar, stated that his country can increase its exports beyond current levels after the resumption of flows via the Kirkuk-Ceyhan pipeline, in addition to other planned projects at Basra port, according to a report by the state news agency INA on Saturday.
"OPEC member states have the right to demand an increase in their (production) shares, especially if they have projects that led to an increase in production capacity," he said.
Iraq, the group's largest overproducer, was among the states that submitted updated plans to OPEC in April to make further oil output cuts to compensate for pumping above agreed quotas.
Flows through the Kirkuk-Ceyhan pipeline were halted in March 2023 when the International Chamber of Commerce (ICC) ordered Türkiye to pay Iraq $1.5 billion in damages for what it said were unauthorized exports by the KRG.
John Roberts, a senior fellow at the Washington-based think tank Atlantic Council, told AA that the reopening is "helpful, but not crucial."
"The line can carry more than a million barrels a day, about 1% of world production," Roberts said.
"That is a lot of oil and it helps in terms of general supplies."
"But Europe is not short of oil and consumption there plays a smaller role in the energy balance than it used to," he claimed. "So getting the pipeline back into action helps, but it’s not vital."
The resumption of oil flows "eases Türkiye's own energy balance, even though some of that will be crude oil for export at Ceyhan," he added.
Francesco Sassi, a political scientist at the University of Oslo, said the resumption has little impact on European energy security but signals a shift in geopolitics.
"The implications for the wider EU and regional energy markets of the pipeline’s resumption are not particularly evident in terms of energy security, as in these last two and a half years, operators managed to find alternative supplies, especially in the last year of supply glut and lower prices," Sassi said.
"As of today, the resumption tells more about the constitution of an Iraq-Türkiye-KRG energy triangle where the first two partners are preponderant players in regional energy geopolitics."
He added that Iraq needs to reduce its reliance on the Strait of Hormuz, where transit threats have flared amid regional tensions, while Baghdad and Ankara are pushing to resolve disputes with Iraq's KRG.
"The renewed push in both capitals aims at handling energy insecurities while creating a political and economic axis stretching from the Gulf countries to the Mediterranean Sea," Sassi said.
