Shafaq News/ Reuters quoted three sources as saying that a year after the closure ?f the oil pipeline between Iraq and Türkiye, the channel that previously transported around 0.5% ?f global oil supplies remains “stuck ?n limbo”, hindered by legal and financial obstacles t? resume flows.
Approximately 450,000 barrels ?f crude oil flow through the Kurdistan Region ?f Iraq's oil export pipeline via Türkiye every day, and its closure led t? losses ?f between $11 and $12 billion for Iraq, according t? estimates from the Association ?f the Petroleum Industry ?f Kurdistan (APIKUR).
One source familiar with the matter told Reuters that resuming operations ?s not currently being discussed.
On March 25, 2023, Ankara ceased oil flows through the pipeline following an arbitration ruling that deemed its actions a breach ?f the 1973 treaty. The treaty required Baghdad's consent for oil exports from Kurdistan.
Consequently, an Ankara court mandated a $1.5 billion compensation t? Baghdad for unauthorized exports between 2014 and 2018, with an ongoing arbitration covering subsequent years. This legal dispute continues, prolonging tensions between Iraq and Kurdistan region.
Iraq ?s obligated t? make minimal payments t? Türkiye as long as the pipeline remains operational, estimated at approximately $25 million monthly. However, despite this potential financial incentive t? resume flows, sources indicate that Iraq's commitment t? OPEC+ oil export cuts currently sidelines any plans t? restart oil flows from the Kurdistan Region.
The geopolitical landscape further complicates matters due t? strained relations between the Iraqi government and Kurdistan Region, tracing back t? the aftermath ?f Saddam Hussein's overthrow ?n 2003.
Michael Knights, an Iraq expert at the Washington Institute for Near East Policy, highlighted the United States' interest ?n mediating a resolution. Lower oil prices resulting from the pipeline's restart would align with U.S. interests, prompting diplomatic efforts t? broker a deal amid the ongoing legal and geopolitical challenges.