Türkiye-Iraq oil pipeline deal set to expire in 2026

ANKARA

Türkiye officially announced on July 21 that its longstanding crude oil pipeline agreement with Iraq, signed in 1973, will expire in 2026.

Published in the Official Gazette after a presidential decree by President Recep Tayyip Erdoğan, the decision stated that the original deal and all related protocols will end on July 27, 2026.

The agreement served as the legal backbone for the Kirkuk-Ceyhan pipeline, a key route channeling Iraqi oil to the Turkish port of Ceyhan on the Mediterranean coast. Over the years, the deal underwent multiple revisions to adapt to evolving geopolitical and technical dynamics.

Although the original agreement received parliamentary approval in 1975, it has remained a central pillar in Ankara-Baghdad energy relations for over half a century.

A key extension in 2010 prolonged the deal by 15 years and set dispute resolution under French law and the International Chamber of Commerce in Paris.

Disputes arose when the Kurdistan Regional Government (KRG) began exporting oil independently, prompting Baghdad to file an arbitration case. In March 2023, the tribunal ruled in Iraq’s favor, ordering Türkiye to pay $1.4 billion for underpriced sales and excess fees.

Since then, oil exports through the pipeline have been suspended, causing significant losses estimated at $20 billion.

In 2025, efforts to resume exports advanced with a new agreement between Iraq’s federal government and the KRG. The deal includes subsidies and a fixed transport fee of $16 per barrel, seen as crucial for restarting the pipeline.

As the 1973 agreement’s expiration approaches, Ankara and Baghdad are expected to negotiate a new legal framework for energy cooperation. Analysts noted that easing political tensions between Erbil and Baghdad could pave the way for reopening the key pipeline.