By Alexander Miller, consultant in energy markets. Eurasia Business News, August 5, 2025. Article n°1684.
Turkey has officially cancelled its 1973 oil pipeline agreement with Iraq, with the termination set to take effect on July 27, 2026. This decision was announced in a decree published in Turkey’s Official Gazette and signed by President Recep Tayyip Erdoğan. The agreement, which facilitated the export of crude oil from northern Iraq’s Kirkuk region to Turkey’s Mediterranean port of Ceyhan, had been in place for 52 years, including subsequent amendments and renewals.
The pipeline has been inactive since March 2023 after an international arbitration panel ordered Turkey to pay Iraq about $1.5 billion in damages. The ruling was due to Turkey allegedly allowing the Kurdistan Regional Government (KRG) to export oil without Baghdad’s permission between 2014 and 2018. Prior to the suspension, the pipeline transported around 500,000 barrels per day, though its full capacity is up to 1.5 million barrels per day.
The cancellation appears to be part of Turkey’s strategic effort to reset legal responsibilities and exert pressure on Iraq to negotiate a new deal potentially more favorable to Turkey, including broader cooperation in oil, gas, and petrochemicals. Turkey has also expressed willingness to negotiate a new agreement beyond crude oil transport. Iraq is reviewing a Turkish proposal to renew energy cooperation under a new framework, but experts doubt a quick resolution given the ongoing disputes, including compensation for unauthorized exports.
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Turkey did not abruptly cancel the 1973 pact but rather issued formal notice more than a year prior to its expiration as required, signaling a strategic reset driven by arbitration rulings and geopolitical considerations. The pipeline remains closed, and negotiations for a new deal are underway but face significant challenges.
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© Copyright 2025 – Eurasia Business News. Article no. 1684
Eurasia Business News 