Baghdad Pressures Turkey To Restart Pipeline Flows

14 Apr 2023 Issue: 66 / 15 By: Yesar Al-Maleki

The interim oil deal between Erbil and Baghdad has been agreed on broad terms that leave details for later. For now, state marketer Somo has offered trading firms that traditionally buy Kurdish crude first refusal – but on its terms. Meanwhile, as Ankara delays restarting crude oil flows to Ceyhan, Baghdad has decided to up the legal pressures on Turkey.

The 4 April landmark deal between Iraq’s central government and the semi-autonomous Kurdistan regional government (KRG) was explicitly intended to kickstart northern oil exports, leaving key details to be thrashed out later (MEES, 7 April). But Turkey sees things differently and is holding off on re-opening the pipeline which connects to its Ceyhan export terminal as it seeks reassurances from Baghdad over further legal action. As a result, the shut down has dragged on for a third week.

This means that approximately 500,000 b/d of crude oil exports from northern Iraq remain stranded, with no route to market (MEES, 31 March). Turkey closed the pipeline on 25 March after the ICC awarded Baghdad $1.47bn in damages for permitting the export of KRG-marketed crude through the system against Baghdad’s wishes. (CONTINUED - 1896 WORDS)