The Turkish government has announced the termination of a decades-old crude oil pipeline agreement with Iraq, while simultaneously expressing interest in negotiating a new arrangement that could revive the suspended Kirkuk-Ceyhan oil pipeline.
A presidential decree published in Turkey’s Official Gazette on Sunday stated that the 1973 Turkey-Iraq Crude Oil Pipeline Agreement, along with all related protocols and amendments, will be formally annulled as of July 27, 2026. The agreement had served as the legal foundation for the transport of Iraqi crude oil through Turkish territory to the Mediterranean port of Ceyhan for over five decades.
The pipeline has been inactive since March 2023, following an international arbitration ruling that ordered Turkey to pay $1.5 billion in compensation to Iraq for allowing crude oil exports from the Kurdistan Regional Government (KRG) without Baghdad’s approval between 2014 and 2018. Turkey is appealing the decision.
Interest in Renewed Cooperation
Despite the formal termination of the existing agreement, a senior Turkish official told Reuters that Ankara still views the pipeline as a strategic asset and remains open to reviving it under a revised framework. The official said that Turkey has maintained the infrastructure and is seeking a “new and vibrant phase” for the pipeline that would benefit both countries and the broader region. No further details were provided regarding the terms Turkey may seek in a new agreement.
Before its closure, the pipeline had transported around 500,000 barrels per day (bpd) of crude, mainly from oil fields in northern Iraq. At full capacity, the pipeline system — consisting of two lines — is capable of transferring up to 1.6 million bpd, according to Turkey’s state-owned pipeline operator, BOTAŞ.
Negotiations Remain Unresolved
Efforts to resume oil exports have been ongoing but have yet to result in a breakthrough. Although Turkey stated in late 2023 that the pipeline was operationally ready, talks involving Baghdad, the KRG, and international oil companies operating in northern Iraq have failed to produce an agreement on export terms, revenue sharing, and legal guarantees.
Iraq’s federal government and the KRG recently reached a preliminary understanding under which the KRG would supply 230,000 bpd to Iraq’s national oil company SOMO for export through Turkey. In return, Baghdad would release funds to pay KRG public sector salaries. However, the full implementation of this arrangement remains pending.
The Association of the Petroleum Industry of Kurdistan (APIKUR), which represents several international oil firms, stated last week that its members are ready to resume exports, provided their existing contracts are honored and legal clarity is ensured.
Broader Context: The Development Road
Turkey has also linked the future of the pipeline to the Development Road project — a planned trade and transit corridor connecting Iraq’s southern Basra port to the Turkish border via road and rail infrastructure, with eventual links to European markets. The project has received initial funding from Iraq and is seen as a longer-term strategic initiative to facilitate regional integration.
A Turkish official said that the oil pipeline could be integrated into the Development Road framework, enhancing its role in regional energy and trade connectivity.
U.S. Encourages Progress
The United States has expressed support for resolving the dispute. State Department spokesperson Tammy Bruce said last week that Washington encourages both Baghdad and Erbil to find a solution that enables the resumption of exports and ensures economic stability.
“Addressing these issues quickly would signal that Iraq puts the interests of its people first and is committed to creating an environment in which companies will want to invest,” Bruce said.
Outlook
While Turkey’s termination of the 1973 pipeline agreement marks the end of a long-standing legal framework, it does not appear to rule out the possibility of future cooperation. Whether a new agreement can be reached will depend on the resolution of arbitration disputes, the ability of Iraq’s federal and regional authorities to align on export mechanisms, and the willingness of both sides to negotiate a shared framework for pipeline operations.
