Iraq, Turkiye Seal Deal To Ship Iraqi Crude Oil via Ceyhan Port

Iraq and Turkey signed a deal Saturday to increase oil exports through a pipeline to the Turkish Mediterranean port of Ceyhan, as Baghdad seeks to diversify its oil export routes and reduce reliance on Gulf shipping lanes.

Iraqi Oil Minister Bassem Mohammed Khudair Al Abadi said in a statement that the agreement will remain in effect for one year while the two countries finalize a broader framework agreement covering cooperation in the oil, electricity and water resources sectors.

The agreement comes as Iraq moves to strengthen the resilience of its oil export infrastructure following disruptions to shipping through the Strait of Hormuz since the US-Iran war began in February.

Al Abadi said the deal provides for a minimum export volume of 750,000 barrels of Iraqi crude per day through the pipeline, which runs from Kirkuk in northern Iraq to Ceyhan.

The Iraq-Turkey pipeline has been largely idle since 2023 after exports from Iraq’s semiautonomous Kurdish region were halted following legal and commercial disputes, although exports through it resumed in a limited capacity last year.

Iraqi Prime Minister Ali al-Zaidi called the agreement “an important strategic milestone to ensure the uninterrupted flow of our oil exports and strengthen economic cooperation.”

The Iraq-Turkey pipeline has been largely idle since 2023 after exports from Iraq’s semiautonomous Kurdish region were halted following legal and commercial disputes, although exports through it resumed in a limited capacity last year.

Iraqi Prime Minister Ali al-Zaidi called the agreement “an important strategic milestone to ensure the uninterrupted flow of our oil exports and strengthen economic cooperation.”

Iran’s effective closure of the Strait of Hormuz earlier this year forced Baghdad to scramble for alternative export routes. The flow of oil between the two countries is expected to extend Baghdad’s only functioning oil export route to the Mediterranean.

Iraqi oil exports collapsed by more than 80 percent in the weeks after the United States and Israel launched strikes on Iran in late February, with monthly oil revenues falling from around $6bn to under $2bn as shipments through the Gulf were disrupted.

The Kirkuk-Ceyhan Oil Pipeline currently carries only about 170,000 bpd of its 1.5-million-bpd capacity, according to Turkish data, largely from fields in Iraq’s Kurdistan region, which have themselves faced repeated drone and missile attacks since the Iran conflict began.

Ankara seeks to extend the pipeline eventually to carry crude from Iraq’s southern fields as well, with both sides describing talks on a longer-term deal as ongoing.