Iraq Now Stating The Obvious, It’s Up To Turkey To Re-Open Oil Pipeline

(Pipeline and Gas Journal)

It took over five months for Baghdad to publicly announce that Turkey was not serious about re-opening its oil pipeline to Iraq. This was after numerous false stories that Ankara was ready to compromise.

 

On March 25 the International Court of Arbitration ruled that Turkey broke its contract with Iraq by allowing the Kurdistan Regional Government (KRG) to use its pipeline to export oil. Ankara was to pay Baghdad $1.4 billion in damages and Iraq was to pay Turkey $600 million for unpaid fees and services. Out of spite, Turkey shut down the pipeline and it has been closed ever since.

 

Initially, this seemed like a temporary disagreement but as time passed it became clearer and clearer Ankara was not going to play. First, it said that it was waiting for Baghdad and the KRG to make an agreement over oil exports. When that was done Turkey then wanted to wait for maintenance work on the pipeline to be completed. Then it demanded $956 million from Baghdad as part of the Arbitration Court ruling. Finally, on September 10 an Oil Ministry spokesman announced that “the ball is in Turkey’s court” and Baghdad would await its decision. As the months passed and Ankara kept moving the goal posts it should’ve been apparent that Turkey was angry at the court ruling and taking out its frustration on Iraq. It can keep the pipeline closed indefinitely because it’s not losing a sizeable amount of money.

 

The main loser in this dispute is the KRG. Kurdistan relies upon oil exports through the pipeline for the majority of its revenue. By September it was estimated that the region lost $5 billion. As a result it does not have enough money to meet its bills. Just as important oil companies operating in the region are also losing. Gulf Keystone plans to cut 55% of its workforce in the KRG and is questioning whether it can continue to work there. The Kurds have said nothing of Turkey’s intransigence on this matter and instead has gotten into a war of words with Baghdad. That’s because the Kurdistan Democratic Party is aligned with Ankara and won’t go after its ally. It would much rather defer blame and focus on the Iraqi government.

 

SOURCES

 

eKurd, “Iraqi Kurdistan’s oil suspension casts doubt on Gulf keystone’s future viability,” 8/31/23

 

Kurdistan 24, “’The ball is in Turkey’s court,’ says Iraqi oil official on resumption of Kurdish oil export,” 9/10/23

 

Salem, Amr, “Ceyhan oil pipeline maintenance almost complete,” Iraqi News, 8/28/23

- “Gulf Keystone Petroleum cuts jobs in Iraqi Kurdistan,” Iraqi News 8/31/23

 

Soylu, Ragip, “Turkey seeks $950m damages against Iraq over KRG oil dispute,” 9/9/23