Turkey withdrawing from 50-year crude oil agreement with Iraq

Turkey has announced its decision to withdraw from a long-standing crude oil pipeline agreement with Iraq, originally signed in 1973 and extended for 15 years in 2010.

The move was made official through a presidential decree published in the Official Gazette today.

According to the decree, the Turkey-Iraq Crude Oil Pipeline Agreement, along with its associated protocol and related agreements, will be terminated as of Jul 27, 2026.

The first phase of the pipeline, built under the original agreement signed on Aug 27, 1973, became operational in 1976. The agreement was renewed in 2010 for an additional 15 years.

This announcement comes as the Kirkuk-Ceyhan Oil Pipeline has remained out of service for an extended period. Oil exports through the pipeline were halted in Mar 2023, following a ruling by the International Chamber of Commerce (ICC) in Paris.

The court had found that Turkey had breached the 1973 agreement by allowing the KRG to export oil independently of Baghdad’s State Oil Marketing Organization (SOMO).

The timing also coincides with a critical moment in Iraq, where a new energy arrangement is taking shape. On Jul 17, Iraq’s federal government and the Kurdistan Regional Government (KRG) reached a new agreement requiring the KRG to hand over all oil production to the SOMO.

Under the deal, the KRG must supply at least 230,000 barrels of oil per day to Baghdad. For each barrel delivered, the regional government will receive an advance payment of 16 US dollars.

The agreement is seen as a step toward resuming oil exports that were halted on Mar 25, 2023. (HA/VK)