• Oil & Gas - News
  • Updated: May 11, 2023

Iraq Urges Turkey To Resume Crude Oil Shipments

Iraq Urges Turkey To Resume Crude Oil Shipments

Iraq has formally asked Turkey to reopen the pipeline that transports its crude oil from the semi-autonomous Kurdistan Region to the port of Ceyhan according to a statement released by the Kurdistan Regional Government (KRG) of Iraq on Thursday.

The pipeline's oil flow has been stopped many weeks ago.

The KRG in a statement said: “Both the Kurdistan Region’s Ministry of Natural Resources and Iraq’s Ministry of Oil are reportedly waiting for Turkey’s response before resuming oil exports.”

The semi-autonomous Kurdistan Region's crude oil exports are expected to come to an agreement between Baghdad and Erbil over the next two weeks, according to the oil minister of Iraq last week. 

“Regarding the agreement with the Region, we have reached the final stage and hopefully we will reach the final agreement on the exportation of crude oil within a maximum of two weeks,” Iraq’s oil minister Hayan Abdul Ghani said at the time. 

The only problem left to be resolved was how Iraq would manage the bank account used to store Erbil's oil revenue.

Kurdistan's crude oil exports, which were between 400,000 and 450,000 bpd and transported via an Iraqi-Turkish pipeline to Ceyhan before being transported on tankers to international markets, were suspended by the Iraqi federal government in late March.

In a disagreement over crude flows from Kurdistan a few days prior, the International Chamber of Commerce decided in favour of Iraq against Turkey.

According to Iraq, Turkey shouldn't let Kurdish oil shipments through Ceyhan and the Iraq-Turkey pipeline without prior authorisation from the Iraqi federal government.

The court decided that Turkey must pay Iraq $1.5 billion in restitution for what now looks to have been illicit oil shipments over a five-year period.

The supply of oil from the Kurdistan area was subsequently halted when Turkey responded by cutting off the Kirkuk-Ceyhan pipeline.

Lack of storage also caused the oilfields in Kurdistan to shut down.

According to three Reuters sources familiar with the situation, the negotiations between Baghdad and Erbil are centred on who would have more control over the oil flows.

The most recent round of negotiations agreed that export profits would be put into an existing KRG bank account with Citi in the UAE. Baghdad will have access for audits.

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