Iraq-Turkey Pipeline to Resume Operations This Week
Turkey is set to resume operations on the oil pipeline from Iraq that was suspended approximately six months ago. This announcement was made by the Turkish Minister of Energy, Alparslan Bayraktar, as reported by Hurriyet.
"We will start operating the Iraq-Turkey pipeline this week. It will be capable of supplying nearly half a million barrels to the global oil markets," Bayraktar stated during the ADIPEC conference in Abu Dhabi.
He emphasized that Turkey serves as a reliable transit route for oil and gas.
Bayraktar confirmed that maintenance work on the Iraq-Turkey pipeline, which accounts for approximately 0.5% of global crude oil supplies, has been successfully completed.
To provide context, Turkey had suspended the flow on the northern route of Iraq's oil exports following an arbitration decision by the International Chamber of Commerce (ICC). The decision required Ankara to compensate Baghdad for unauthorized exports made between 2014 and 2018.
Following this, Turkey initiated maintenance work on its section of the oil pipeline after a significant earthquake in February. Turkey and Iraq agreed to pause the pipeline flow until necessary maintenance work was completed and continue to engage in legal disputes regarding the arbitration decisions.
An unnamed Iraqi official stated that oil shipments cannot resume until commercial and financial issues are resolved, as reported by Bloomberg.
Turkey currently refuses to pay a $1.5 billion fine that the arbitration court awarded to Iraq for transporting oil from Kurdistan without Baghdad's approval. Turkey has indicated it has no intention of compensating for the losses and has requested that the Kurds do so.
Earlier, the Minister of Foreign Affairs for the semi-autonomous Kurdistan Regional Government, Safeen Dizayee, noted that the pipeline's closure had already cost producers and the state budget nearly $5 billion.
The resumption of the oil pipeline's operation is expected to provide some relief to the oil market. Following production cuts by the Organization of the Petroleum Exporting Countries and its allies, oil prices rose to $100 per barrel.
After Turkey's comments, oil prices experienced an increase but later receded, with most of the gains eroded.