Iraq seeks talks with Turkey on new oil transit deal

Iraq will seek a new oil transit agreement with Turkey before a key pipeline deal expires in July, as Baghdad moves to avoid another disruption to crude exports through the Iraq-Turkey pipeline.

The pipeline gained importance for Iraq after regional tensions and disruptions to shipping through the Strait of Hormuz affected the country’s southern oil exports, increasing Baghdad’s need for alternative export routes.

Prime Minister Ali Faleh al-Zaidi’s Cabinet authorized Iraq’s Oil Ministry to begin negotiations with Turkey on a long-term agreement covering transit tariffs, delivery volumes and commercial and technical requirements, according to a Cabinet statement published Monday.

The talks are expected to focus on a replacement for the Iraq-Turkey crude oil pipeline agreement, which has governed Iraqi oil exports through Turkey since 1973.

Turkish President Recep Tayyip Erdoğan last year signed a decree ending the agreement and related protocols effective July 27, 2026, according to Turkey’s Official Gazette. The agreement was signed on August 27, 1973, and the first phase of the pipeline became operational in 1976.

The Iraq-Turkey pipeline has faced repeated disruptions over disputes between Baghdad, Ankara and the Kurdistan Regional Government (KRG), which governs Iraq’s semi-autonomous Kurdish region.

Pipeline exports were halted in March 2023 after Iraq won an arbitration case against Turkey at the International Chamber of Commerce over Ankara’s role in facilitating Kurdish oil exports without Baghdad’s approval.

The tribunal ordered Turkey to pay Iraq damages, deepening tensions over control of northern Iraqi oil exports.

Baghdad and the KRG reached an agreement in March to resume northern oil exports through Turkey. Under the deal, revenues were to be directed to Iraq’s federal treasury, with initial flows expected to start at around 170,000 barrels per day and rise to 250,000 barrels per day.

Hadeel Hasan, managing partner at Baghdad-based law firm Al Hadeel Al Hasan, said in a social media post last week that around 230,000 barrels per day were currently flowing through the pipeline after the March agreement.

“A failure to renew the transit treaty would put this revenue stream at risk,” Hasan said.

She said Turkey had signaled that a new agreement must be finalized before the July deadline to ensure exports continue without interruption.

“The critical deadline is approaching for Iraq’s energy sector,” Hasan wrote. “For businesses with exposure to Iraq’s oil export infrastructure, scenario planning for potential disruptions is essential.”

A representative of an international energy company operating in the Kurdistan region told industry publication Upstream that companies hope a new agreement could improve export revenues and create more stable operating conditions for foreign firms in northern Iraq.

“Exports remain a significantly better option in terms of revenues against local sales,” the representative said. “The Iraq-Turkey pipeline is capable of shipping significantly more oil than it handles today.”

The 1973 agreement was extended several times, including in 2010 for another 15 years. Its expiration would come as Iraq seeks to protect oil revenues after years of disputes over who controls exports from the country’s north.