The agreement between Iraq's federal government and Kurdistan Regional Government (KRG) on oil exports has reignited expectations that crude flows through the long-idled Iraq-Türkiye pipeline may soon resume.
According to a statement from the Iraqi Prime Minister's press office, the Council of Ministers approved the new oil deal with the KRG during its July 17 meeting. Under the terms of the agreement, the KRG will transfer revenues from all oil produced in the region to Iraq's State Organization for Marketing of Oil (SOMO) and receive a $16 per barrel advance on deliveries.
The KRG is required to supply at least 230,000 barrels per day (bpd) to Baghdad, with any additional volumes contingent on output increases to also be handed over to SOMO. In the event of a halt in exports, the entire production will be transferred to Iraq’s Ministry of Oil.
On February 2, Iraq’s parliament passed legislation covering production cost subsidies for international oil companies operating in the KRG and setting the transportation fee at $16 per barrel—a move seen as a key milestone toward reopening the pipeline to Türkiye.
The latest agreement marks a significant step toward restarting oil flows that have been suspended since March 25, 2023.
- Easing Baghdad-Erbil tensions revives Kirkuk-Ceyhan Pipeline prospects
KRG’s pledge to supply 230,000 bpd to Iraq's federal government signals growing consensus between the sides, and easing Baghdad-Erbil tensions could pave way for reactivation of the Kirkuk-Ceyhan Pipeline, a vital route for oil exports via Türkiye, Sercan Caliskan, Iraqi studies researcher at the Center for Middle Eastern Studies (ORSAM), told Anadolu.
Caliskan also noted that implementing the agreement ahead of Iraq's scheduled November 2025 elections marks a significant step toward strengthening domestic political stability.
Pointing to significant obstacles ahead, Caliskan recalled recent unmanned aerial vehicle (UAV) strikes on oil infrastructure in northern Iraq adding that it once again expose security vulnerabilities and risks facing the region's energy infrastructure.
"Both political and security challenges facing the pipeline must be addressed, including mitigating potential risks along its route. The escalation of existing UAV attacks targeting pipeline regions could become a major obstacle to the line's sustainable operation," Caliskan said.
"Therefore, while political negotiations continue, it is crucial to consider not only security threats stemming from regional crises but also those emerging within Iraq that may impact the pipeline's corridor," he added.
- US influence and election timeline may accelerate progress
Underlining the importance of closely monitoring foreign policy dynamics around the Kirkuk-Ceyhan Pipeline's reactivation, Caliskan said, that US has long pressured Iraq's central government to reopen the line.
In this context, Caliskan emphasized that the latest agreement between Baghdad and the KRG establishes a technical and political foundation for resuming oil exports via the Kirkuk-Ceyhan pipeline, adding that the easing atmosphere created by the deal could enable negotiations to reactivate the line.
He also noted that support from influential external actors like the US could empower Baghdad to advance efforts toward reopening the pipeline.
Caliskan mentioned that with limited time remaining until Iraq’s 2025 elections, recommissioning the Kirkuk-Ceyhan Pipeline could emerge as a key negotiation topic between the central government and the KRG during the electoral process.
"For this reason, every step taken will play a decisive role not only in energy policy but also in shaping pre-election political dynamics and alliances. However, it should be noted that this positive development—restoring negotiation channels between the two sides to normalcy—could pave the way for reopening talks on the Kirkuk-Ceyhan Pipeline ahead of the elections," Caliskan concluded.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr