The Iraqi Ministry of Oil has begun discussions with Ankara to continue exports through the Iraq-Turkey pipeline within two days, Minister of Oil Hayan Abdul-Ghani said in a statement brought by the State Gazette Outlet at the end of February 24.
“After the Turkish approval arrives, exports will continue,” Abdul-Ghani told Ina.
Momentum has taken to reopen the pipe, closed for almost two years, because US President Donald Trump has issued a clear warning that exports must be continued or Iraq may face sanctions. The US issued additional sanctions against Iran on February 24 because Trump was likely to re -enforce the “maximum pressure” campaign, and opening pipes could be an additional source of barrels in the international market.
Türkiye’s position for about one year is ready to receive oil from Iraq after completing maintenance in the pipeline in October 2023.
It is unclear whether Türkiye’s position has changed, but an analyst told the previous S&P Global Commodity Insights that the cost of transit paid to Türkiye was one of the problems that must be addressed. Türkiye can also look for additional political concessions about goods that are not related to energy.
The Iraq-Turkey pipe was officially closed by Turkey on March 23, 2023, following an international arbitration decision that Turkey had violated bilateral agreements with Federal Iraq by allowing Kurdistan to use pipes to market their independent crude oil.
After a long debate, Kurdistan and International Oil Company said that crude oil will now be marketed through the Somo Federal Entity, and the Amendment to the Budget Law which is approved in February 2 guarantees a payment For this reason, rough is produced in this region.
The larger stumbling blocking block remains an agreement of an international oil company operating in the region, with sources that say the company has not received a contract or guarantee that past debt will be paid.
In June 2024, oil companies said they owe more than $ 1 billion in payment from KRG for previous production.
The Kurdistan Oil Industry Association, a group representing most of the international oil companies in the region, said February 22 that it sought “written sales and lifting agreements with the Iraqi government and the Kurdistan regional government that provided transparency of payments and guarantees. Without political intervention.
Iraq-Turkey pipes that were previously brought up to 400,000 b/d from Kurdish crude oil which were dominated by Ceyhan Turkish port to serve the Mediterranean Market.
Even if the pipe is reopened, Iraqi crude oil production is still examined by the OPEC+ quota, which routinely communicates too much. Iraq pumps 4.06 million w/d in January, down from the previous month but still exceeds a quota of 60,000 B/d, according to the latest OPEC+ Platts survey from Commodity Insights.
Baghdad promised February 24 to submit a new compensation plan for excessive production in the past which would take into account every production exported from Kurdistan.
While OPEC has maintained its current production cuts, they are expected to immediately ease, potentially increasing the raw volume available in the market starting in April, but the beginning allocated by Iraq by 12,000 B/D simple. Depending on OPEC’s view of market conditions, Iraqi output will gradually increase between 2025 and 2026.
Source: Platts
