A pipeline transporting oil from Iraq’s Kurdistan region to Turkiye is ready to reopen and continue exports, seemingly ending a two-year-long dispute over its closure.
According to Reuters news agency on Tuesday, Safeen Dizayee, foreign minister of Iraq’s semi-autonomous Kurdistan Regional Government (KRG), announced that the Iraq-Turkiye Pipeline (ITP) is set to resume its operations shortly.
Although the Kurdish official did not specify a time, Iraq’s oil minister Hayan Abdel-Ghani reportedly said it would resume next week.
“All arrangements that were set on the table have been agreed to, with the aim to prepare for re-exports. There shouldn’t be any hiccups. The legal aspects have been met, the technical aspects are in place”, Diyazee said. “The button just has to be pushed to increase production and then re-export”.
The resumption of the pipeline’s operations potentially ends the two-year-long dispute over the mechanism, after the International Chamber of Commerce (ICC) ruled in favour of Iraq’s legal case that Iraqi state oil firm SOMO was the only party authorised to manage crude exports via the Turkish port of Ceyhan, and that the Turkish oil and pipeline firm BOTAS had violated a 1973 agreement by facilitating Kurdish oil exports.
Turkiye was then subsequently ordered to pay Iraq $1.5 billion in damages for unauthorised pipeline imports between 2014 and 2018, leading to Ankara shutting down the pipeline and its operations back in March 2023.
The issue was gradually resolved over the past year, with matters becoming clearer earlier this month when the Iraqi parliament approved a budget amendment which set the rate of oil transport and production costs in the Kurdistan region at $16 per barrel.
KRG foreign minister Dizayee hailed the reopening of the pipeline as an expected boost to the Kurdistan region’s economy and budget, stating that it “means Kurdistan will benefit from the federal budget and hopefully this will end the saga of salaries coming or not coming, received in dribs and drabs”.
