Türkiye launches talks with Iraq for new, expanded energy agreement

ANKARA

Ankara has initiated talks with Baghdad for a new and broader energy agreement, the Turkish state news agency reported on July 22, a day after Türkiye announced that its decades-old oil accord with Iraq will expire in 2026.

The presidential decree, published in the Official Gazette, stated that the original agreement — which dates back to 1973 and was renewed in 2010 — along with all associated protocols, will terminate on July 27, 2026.

The deal has long served as the legal framework for the Kirkuk-Ceyhan pipeline, a strategic corridor transporting Iraqi crude to the Turkish Mediterranean port of Ceyhan.

Over the years, the agreement has been revised several times to adapt to shifting geopolitical and technical dynamics. However, changing regional conditions, evolving energy markets and growing expectations on both sides have exposed the limitations of the current structure, prompting calls for a more modernized and comprehensive partnership.

According to the state-run Anadolu Agency, the envisioned new agreement aims to establish a far-reaching cooperation mechanism built on a shared strategic vision in the energy sector.

This includes long-term collaboration in crude oil and natural gas projects, the development of hydrocarbon fields, joint investments in petrochemicals and refining, and initiatives in electricity generation and transmission.

The deal also seeks to deepen the trade of oil, gas and electricity on multiple fronts.

Talks have already begun to explore a more extensive framework for the transport of Iraqi-origin crude to Türkiye and global markets via Turkish infrastructure.

An Iraqi Oil Ministry official confirmed that Türkiye has submitted a draft proposal to renew and expand the existing energy pact.

The draft outlines cooperation in oil, gas, petrochemicals and electricity, the official said, adding that the ministry is currently reviewing the proposal and negotiating with Ankara to reach “a formula that serves the interests of both Iraq and Türkiye.”

The pipeline system — comprising two major lines and the BOTAŞ-operated Ceyhan Terminal — has a total daily transport capacity of 1.5 million barrels. The two sides will also address future arrangements regarding the capacity to be allocated for Iraqi oil exports in the coming period.

The original 1973 agreement was extended in 2010 for another 15 years, with provisions for resolving disputes under French law and the International Chamber of Commerce in Paris.

Tensions escalated after the Kurdistan Regional Government (KRG) began exporting oil independently, prompting Baghdad to initiate arbitration proceedings. In March 2023, the tribunal ruled in Iraq’s favor, ordering Türkiye to pay $1.4 billion in damages for underpriced sales and excess transit fees. Since then, exports through the Kirkuk-Ceyhan pipeline have been halted, resulting in estimated losses of around $20 billion.

In 2025, efforts to resume oil flows gained momentum after Iraq’s federal government and the KRG reached a new agreement. The deal includes subsidies and sets a fixed transport fee of $16 per barrel — a key step toward reviving the pipeline and restoring regional energy cooperation.