Baghdad and Ankara sign one-year Ceyhan export deal

Iraq’s oil ministry has signed a one-year agreement with Turkey covering the transport and loading of Iraqi crude through the Iraq-Turkey pipeline to the Mediterranean port of Ceyhan.

The accord was concluded under the patronage of oil minister Basim Muhammad Khudair Al-Abadi and in the presence of the Turkish minister of energy and natural resources, according to a statement from the Iraqi oil ministry.

Al-Abadi said the deal would run for twelve months, pending completion of a wider framework accord between the two governments encompassing “oil, electricity, and water resources.” He put the floor for exports at 750,000 barrels per day (bpd) of Iraqi crude.

The pipeline, which links the northern Iraqi fields to Ceyhan on Turkey’s southern coast, has been the subject of protracted commercial and legal wrangling since flows were halted in March 2023 following an International Chamber of Commerce arbitration ruling that ordered Ankara to pay Baghdad $1.5bn for unauthorised exports routed through the Kurdistan region between 2014 and 2018.

Restoring throughput of 750,000 bpd would return the conduit to close to its recent operational capacity and give Baghdad a second major export outlet alongside the southern Basra terminals, which currently carry the bulk of the country’s roughly 3.4mn bpd of seaborne shipments.

The one-year horizon suggests both sides remain some way from settling the commercial architecture that will underpin longer-term flows, including tariff arrangements and the treatment of volumes originating in the Kurdistan region. The oil ministry statement made no reference to how Kurdish barrels would be handled under the interim deal.

The signing was attended by the undersecretary of the ministry of foreign affairs, the undersecretary of the oil ministry for extraction affairs, the director general of the State Oil Marketing Organisation, the director general of the North Oil Co., and the directors general of the economic, legal and internal control departments, together with an adviser at the foreign ministry and the assistant director general of accounting at the finance ministry.

Al-Abadi framed the pipeline accord as a stepping stone to a broader bilateral package, with electricity and shared water resources – a persistent point of friction between the two neighbours – folded into the same negotiating track. No date has been set for concluding the wider framework agreement.