Turkey still wants to revive an oil pipeline with Iraq that has been shut for two years due to a dispute, a senior Turkish official told Reuters on Monday, even as Ankara announced the end of a decades-old agreement covering the pipeline.

The 1.6 million barrels per day Kirkuk-Ceyhan pipeline has been offline since 2023 after an arbitration court ruled Ankara should pay $1.5 billion in damages for unauthorised Iraqi exports between 2014 and 2018. Turkey is appealing the ruling.

In a decision published in its Official Gazette on Monday, Turkey said the existing deal dating back to the 1970s – the Turkey-Iraq Crude Oil Pipeline Agreement – and all subsequent protocols or memorandums would be halted from July 27, 2026.

There was no immediate comment from Iraq on the decision.

Iraq and Turkey have been working to resume oil flows from the pipeline. Ankara said in late 2023 that the pipeline was ready to receive Iraq’s oil but talks between Baghdad, Iraq’s Kurdistan Regional Government and independent oil producers were not able to reach an agreement on terms.

The official said the pipeline had the potential to become a “highly active and strategic pipeline for the region”.

The person added that Turkey had invested heavily in its maintenance, and noted its importance for regional projects like the Development Road – a planned trade route involving Turkey and Iraq.

“A new and vibrant phase for the Iraq-Turkey pipeline will benefit both countries and the region as a whole,” the official said, without giving details of what Ankara wanted the new agreement to include.

Turkey sees the Development Road initiative – a high-speed road and rail link, running from Iraq’s port city of Basrah on the Gulf to the Turkish border and later to Europe – as an opportunity to extend the pipeline further south. Baghdad allocated initial funding for the project in 2023.

Source: Reuters