Turkey plans to renegotiate with Iraq on the oil pipeline connecting the two countries, which has been suspended for more than two years due to payment disputes.
A senior Turkish official on condition of release said Turkey was unhappy with the oil pipeline's ineffective exploitation under current agreements. Turkey and Iraq will benefit more if a new deal is reached.
According to the decree published in the Official Newspaper of Turkey, the 1973 agreement stipulating the operation of the pipeline between Turkey and Iraq, along with all relevant documents signed thereafter, will be terminated on July 27, 2026.
The negotiation plan is the latest development in the incident that began in March 2023 when Turkey closed the oil pipeline with Iraq. The move comes after an international arbitration court ordered Turkey to pay Iraq $1.5 billion in damages for oil exports without a pipeline license.
Since then, there have been many efforts to restore oil transportation activities through this route but have been unsuccessful. Part of the reason is the disagreement between the Iranian government and the Kurdish autonomous region and oil and gas companies operating in the region.
However, last week, the central Iranian government and the Kurdish autonomous region reached a preliminary agreement on oil transportation, opening up hopes of restoring flow through the pipeline. However, contracts with enterprises in the Kurdish autonomous region have not yet been signed.
It is not yet clear whether the desire to negotiate will delay the restart of the pipeline.
Before it was put into operation in 2023, the pipeline between Turkey and Iraq transported about 500,000 barrels of oil per day.
When fully operational, the two branches of the pipeline can transport 1.5 million barrels of oil per day, according to Turkish state pipeline company Botas.
As the pipeline comes to an end, much of Iraq's oil production is now exported through southern ports.
The Turkish official added that the oil pipeline connecting the country to Iraq also plays an important role in the Development Corridor project - an infrastructure initiative to connect Iraq with Europe via Turkey.
Turkey has mentioned the possibility of supporting investment in refineries and petrochemical plants in Ceyhan, the end point of the pipeline in Iraq.
