An official said that Iraq is set to write to Türkiye to request a resumption in pipeline flows after its federal government and the semi-autonomous northern region reached an initial agreement to restart northern oil exports this week.
Türkiye stopped pumping about 450,000 barrels per day (bpd) of Iraqi crude from a pipeline from the Fish-Khabur border area to its Mediterranean Ceyhan port on March 25 after the International Chamber of Commerce (ICC) ordered Baghdad and Ankara to pay each other compensation on a longstanding arbitration case.
The case relates to Iraq’s claim that Türkiye violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil through a pipeline to the port of Ceyhan without its consent. As a result, Baghdad deems the KRG exports via the Ceyhan port illegal.
Ankara said the ICC had recognized most of Türkiye’s demands. However, its Energy Ministry said the chamber ordered Iraq to compensate Türkiye for several violations concerning the case.
“Following several meetings between the KRG and federal government, an initial agreement has been reached to resume oil exports through Ceyhan this week,” Lawk Ghafuri, head of foreign media affairs for the KRG, wrote in a Twitter post.
“This agreement will remain in effect until the oil and gas law bill is approved by the Iraqi Parliament,” Ghafuri said.
Iraq’s Oil Ministry in Baghdad said on Sunday it hopes to reach a final agreement soon with the KRG on resuming northern oil exports.
The halted flows only account for about 0.5% of the global oil supply. Still, the stoppage, which forced oil firms operating in the region to stop output or move production into rapidly filling storage tanks, helped boost oil prices back to nearly $80 a barrel last week.
Iraq’s Oil Ministry said that details on the new export agreement would be announced in “due course.”
Sources told Reuters on Saturday the agreement states that Iraq’s northern oil exports will be jointly exported by Iraq’s state-owned marketing company SOMO and the KRG’s Ministry of Natural Resources (MNR).
The resumption of pipeline flows from Iraq’s semi-autonomous Kurdistan region will still need approval from Türkiye.
“A letter of request to resume oil flows will be sent by Baghdad to Ankara,” a KRG official told Reuters on Sunday.
Sources last week told Reuters that Türkiye wants an unfinished court case settled with Iraq before the pipeline reopens.
With its proven oil reserves of approximately 145 billion barrels, Iraq is the fifth-largest producer in the world and the second-biggest Organization of the Petroleum Exporting Countries (OPEC) producer, with a daily production of more than 4.5 million barrels.
The country has been in a deadlock for years due to the misuse of resources and the unfair distribution of oil revenues.
