After approximately 2 years, the reopening of the Iraq-Turkey pipeline is expected. Initially, a daily export target of 185,000 barrels of oil via Ceyhan Port is aimed. Following Iraq’s Oil Minister Hayyan Abdulgani’s announcement through the Iraq Oil Marketing Company (SOMO) that oil exports would resume via Ceyhan Port, another step closer to the reactivation of the Iraq-Turkey oil pipeline has been taken. Abdulgani, in his statement made on February 28, announced that oil exports would commence via Ceyhan Port through SOMO. The export, starting at 185,000 barrels per day initially, will gradually increase until reaching the capacity forecasted in the federal budget. Therefore, the resumption of oil flow halted on March 25, 2023, due to the disagreement between Baghdad and Erbil administrations could potentially restart approximately 2 years later.

NEGOTIATION PROCESS WITH KRI
On February 2, the Iraqi Parliament approved changes to the budget law that subsidize the production costs of international oil companies operating in the Iraqi Kurdistan Region (IKR), setting the transportation cost of oil produced in the region at $16 per barrel. This action was seen as a critical development for the restart of oil exports to Turkey. Subsequently, Oil Minister Abdulgani announced on February 4 that IKR oil would be handed over to SOMO for export via Ceyhan Port, and the necessary procedures with Turkey for the export to commence were in progress. Abdulgani also mentioned on February 17 that exports would resume within a week. The same day, IKR Deputy Minister of Natural Resources Kemal Muhammed expressed that the process could be completed by March. The Iraqi Oil Ministry announced on February 22 that the procedures for restarting exports were completed and requested IKR authorities to transfer the produced oil to SOMO for export through the Iraq-Turkey pipeline and Ceyhan Port. Subsequently, the IKR government declared on February 23 that an agreement had been reached with Iraq regarding the resumption of oil exports. They mentioned that a joint technical team was established to inspect the oil pipeline. On February 25, Iraqi Oil Minister Abdulgani stated that the pipeline was ready for exports and shipping was expected to begin within two days. Abdulgani noted that the daily export quantity for oil exports via IKR was set between 300,000 to 325,000 barrels per day, where a portion would be utilized for domestic consumption, and the rest would be exported.

SUPPORT FROM THE US AND RUSSIA
On February 26, US Secretary of State Marco Rubio and Iraqi Prime Minister Muhammed Shiaes-Sudani agreed over the phone to work swiftly towards the reopening of the Iraq-Turkey oil pipeline. IKR President Nechirvan Barzani mentioned on February 26 that they anticipated the region’s oil to be exported via Ceyhan Port soon. Barzani highlighted that technical issues such as companies’ financing were the only obstacles ahead, emphasizing the supportive and encouraging role of the US in this regard. Barzani stated that the US is a fundamental partner for Iraq and IKR, pointing out that American and Russian companies were actively involved in the process.

CREATION OF A $20 BILLION LOSS
The cessation of oil exports from Iraq to Turkey due to disagreements between Baghdad and Erbil resulted in an estimated loss of around $20 billion in the region. In August 2023, IKR Prime Minister Masrour Barzani announced from the X platform that during a meeting with Energy and Natural Resources Minister Alparslan Bayraktar in Erbil, they had reached an agreement on the significance of resuming oil exports via Ceyhan. Bayraktar mentioned in April 2024 that Turkey was not responsible for the issues with the Iraq-Turkey pipeline, stating it was ready for operation since October 4, 2023, but the disagreements between Erbil and Baghdad had a negative impact on the process. The resumption of oil flow to Turkey is expected to contribute to the improvement of Ankara-Baghdad relations.

EFFECTIVENESS OF THE TRUMP ADMINISTRATION
Kate Dourian, Guest Lecturer at the Washington Institute for Near East Policy, stated that foreign companies operating in the IKR region might not desire to hand over oil to SOMO. She expressed the need to consider multiple variables, mentioning that Baghdad’s sole option would be to export its oil from the Khurmala field operated by Kerkuk and Kar Group if that were the case. Moreover, the technical condition of the pipeline, which has been out of operation for about 2 years, arises as another uncertainty. Dourian stated that with the resumption of exports, global supply balances would not be significantly influenced, adding that: “I believe the step towards resuming oil exports was in response to pressure from US President Donald Trump. In fact, the pressure does not directly come from Trump but from the Trump administration. Previously, the Washington administration warned that Iraq must continue its oil exports in the northern region; otherwise, the country would face US sanctions as part of its ‘maximum pressure’ policy towards Iran. Also, I do not think that the resumption of exports will heavily impact global supply balances because Iraq will have to reduce its production in the federal-controlled southern fields to comply with the OPEC+ quota.”