Turkey and Iraq Nearing One-Year Deal to Maintain Crude Oil Pipeline Operations

Turkey and Iraq are finalizing a one-year agreement to maintain operations for the crucial crude oil pipeline connecting the two nations, Turkish Energy Minister Alparslan Bayraktar announced Thursday. The deal aims to ensure the uninterrupted flow of Iraqi crude to global markets via Turkey's Ceyhan port on the Mediterranean.

Terms of the Agreement

The new 12-month pact is expected to be signed within days, just ahead of the current agreement's expiration on July 27. The Turkish minister confirmed the negotiations were in their final phase during an official visit to Baghdad.

"We have brought the agreement that will cover the next 12 months to the final stage. We aim to sign it in the coming days," Bayraktar said in a statement. He added that the oil flow from Iraq to the Ceyhan export terminal will continue under the new terms.

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Background and Market Impact

This agreement provides stability for a significant energy corridor that only recently returned to service. The pipeline had been shut down for two and a half years following a major legal dispute.

Operations resumed late last year after the lengthy halt. The shutdown was triggered by an international arbitration court ruling that ordered Ankara to pay $1.5 billion in damages to Baghdad for unauthorized Iraqi exports that Turkey had facilitated between 2014 and 2018. Securing a new deal is critical for maintaining consistent Iraqi oil exports, a key factor for global crude supply and price stability.