In addition to bilateral neighborly relations and cultural bridges, relations between Türkiye and Iraq are rooted in the Crude Oil Pipeline Agreement signed on August 27, 1973.[1] Despite the geopolitical developments in the region, particularly the First Gulf War since the first delivery in 1976, oil has been as important a bridge as the security diplomacy between the Turkish and Iraqi governments.
The Iraq-Türkiye Crude Oil Pipeline was commissioned in 1976.[2] It connects the Kirkuk oil fields in Iraq to the Turkish port of Ceyhan on the Mediterranean coast of Türkiye, with a total length of approximately 970 kilometers. The system, consisting of two parallel pipes, initially had a capacity of 1.6 million barrels/day. However, over time, this capacity could not be fully utilized due to conflicts, infrastructure problems and political disputes in the region. The strategic importance of the line stems from the fact that it is the main route through which Iraq realizes a large portion of its oil exports. The viability of the line has greatly diminished, especially due to the Gulf wars, the 2003 invasion of Iraq and the post-2014 threat of the State of Iraq and al-Sham (ISIS).
The main problem of the line in the recent period was the decision of the International Court of Arbitration in 2022 and the subsequent closure of the line by Türkiye. This court decision stemmed from the dispute between the Iraqi central government and Türkiye over oil exports from northern Iraq. The court considered Türkiye’s export of oil from Northern Iraq without Iraq’s consent as a violation of international law.[3] However, Fatih Dönmez, Minister of Energy and Natural Resources of the Republic of Türkiye, stated that 4 of the 5 applications made by the Iraqi Central Government were rejected and only 1 was accepted.[4] Following the decision, the line was closed in March 2023 and oil trade between Iraq and Türkiye came to a standstill. This situation negatively affected both Iraq’s oil export revenues and Türkiye’s income from energy transportation. In particular, Iraq lost approximately 450,000 barrels of oil exports per day.
Although it is known that Türkiye has fulfilled its technical obligations (maintenance, repair, line revisions, etc.), it can be said that the decision of the arbitration court was against Türkiye for not taking an interlocutor other than the central government based on the 1973 agreement. The arbitration process started with the lawsuit filed by the Iraqi Central Government (Baghdad) against Türkiye in 2014. The main ground of the case was that Türkiye was exporting oil through the Kirkuk-Ceyhan Pipeline with the approval of the Kurdish Regional Government of Northern Iraq (KRG). In 2014, after DAESH terrorist organization captured some of the Iraqi territory, especially the oil fields, the KRG illegally operated these fields under the name of anti-terrorist operations for a period of time in its favor and sold them to Türkiye. As a result, regardless of the arbitration case or which side is right, it is well known that the line, which has been closed for years, has caused serious costs to both countries and affected stability in the region.
It is obvious that one of the biggest reasons for the oil crisis in the region is that there is still no agreement between Erbil and Baghdad. The lack of full agreement between the KRG and the Iraqi government on the production and transportation costs of oil is seen as one of the biggest obstacles to oil exports.[5] It is even known that there is no agreement on the daily production. For this reason, it is estimated that Iraq has suffered a revenue loss of 19-20 billion dollars since the process started in 2023. Although 90% of the Iraqi Central Government’s budget consists of oil export expenditures, the deprivation of both the region and the global market from Iraqi oil affects stability. From Türkiye’s perspective, it is known that an average of 120 million barrels flowed annually in the 2018-2022 period and a transit fee of $1-2 per barrel was collected from transit revenues. However, with additional revenues, it can be said that a relative revenue loss of five hundred million dollars was experienced from the closure of the line.
Finally, Türkiye stated that the issue should be resolved within the scope of the Development Road Project and that the parties should reach a solution through dialogue.[6] In fact, Turkish Foreign Minister Hakan Fidan’s statement that there would be no imposition on the Iraqi Central Government’s choice of border crossing for the Development Road Project was the biggest indicator that Türkiye fulfilled its obligations. In June 2024, Iraqi Oil Minister Hayan Abdul Ghani said that progress had been made in talks with Kurdish Regional Government officials and representatives of international companies operating there on the resumption of oil exports to Türkiye via the Kirkuk-Ceyhan pipeline. “We have made progress in the talks,” Abdel Ghani said in an interview with state-run Iraqiya TV.[7]
As a result, Türkiye has been pursuing a policy of balance in Iraq for years and has gained important experience in this regard. The failure to reach an agreement between the two governments over the oil is among the biggest reasons for the line to remain closed. In addition, the lack of consensus between international companies and governments is seen as a major technical obstacle. In terms of energy infrastructure in the region, Türkiye has the opportunity to play a leading role in the development of a regional interconnected system that is not limited to oil. Increasing interconnection inertia would increase energy stability in the region and could have a say in the region’s thirst and climate problems, which have been very much in effect in the last 5 years. In addition to the fight against terrorism and security files, the problem of thirst, which is the biggest obstacle to stability in the region, has visibly disrupted welfare and shaken social dynamics within Iraq. Türkiye’s economic policies that will pave the way for the Turkish private sector to invest in the region, along with the sharing of water resources, the reopening of the oil pipeline and energy investments, will be the biggest diplomatic bridge between Turkey and Iraq in the coming years.
[1] “Transit Boru Hatları”, T.C. Enerji ve Tabii Kaynaklar Bakanlığı, https://t.ly/Gzvn2, (Date Accession: 22.11.2024).
[2] “Ham Petrol”, BOTAŞ, https://www.botas.gov.tr/Sayfa/ham-petrol/13, (Date Accession: 22.11.2024).
[3] “Irak, Türkiye aleyhine açtığı ‘petrol’ davasında 1,4 milyar dolar tazminat kazandı”, Euronews, https://tr.euronews.com/2023/03/27/irak-turkiye-aleyhine-actigi-petrol-davasinda-14-milyar-dolar-tazminat-kazandi, (Date Accession: 22.11.2024).
[4] “Türkiye’ye 1,4 milyar dolar ceza söz konusu değil”, T.C. Enerji ve Tabii Kaynaklar Bakanlığı, https://enerji.gov.tr/haber-detay?id=21135, (Date Accession: 22.11.2024).
[5] “Erbil-Bağdat arasındaki anlaşmazlık nedeniyle duran petrol ihracatı Irak ekonomisine zarar veriyor”, AA, https://www.aa.com.tr/tr/ekonomi/erbil-bagdat-arasindaki-anlasmazlik-nedeniyle-duran-petrol-ihracati-irak-ekonomisine-zarar-veriyor/3323060, (Date Accession: 22.11.2024).
[6] “Kerkük-Ceyhan ile alakalı yakında iyi bir gelişme bekliyoruz”, Bloomberg, https://www.bloomberght.com/kerkuk-ceyhan-ile-alakali-yakinda-iyi-bir-gelisme-bekliyoruz-3735294, (Date Accession: 22.11.2024).
[7] Ibid.
