For the second consecutive year, Iraq has been trying to restore crude oil shipments through the Iraq-Turkey pipeline, which remains shut down due to unresolved technical disputes with the semi-autonomous Kurdistan Regional Government (KRG). The prolonged shutdown has already cost Iraq an estimated $19 billion in lost revenue.
“The legal framework is in place. Now, discussions are focused on technical aspects between oil companies, the Iraqi federal government, and the KRG to resume exports,” stated Iraqi Foreign Minister Fuad Hussein.
Prior to the suspension, Iraq was exporting roughly 500,000 barrels per day from northern fields, including those in the Kurdish region, through the now-idle pipeline.
Turkey halted the pipeline in March 2023 after an arbitration ruling determined that Kurdistan owed $1.5 billion in damages to Iraq for transporting oil without Baghdad’s approval.
Hopes for a pipeline restart have increased after Iraq’s parliament passed a budget law amendment, raising compensation for oil extraction and transportation from $6 to $16 per barrel. Oil companies have accepted the new terms.