Turkey opposes the extension of the Kirkuk-Ceyhan oil pipeline agreement with Iraq, which expires on July 27, under the current conditions, Reuters reported, citing a statement by a senior Turkish official, BTA reports.
“There is no point in extending an agreement that has been subject to arbitration“, said the official, whose name the agency did not specify. In his words, “Turkey does not want an extension of the existing agreement in its current form.“
The statement comes after news that Baghdad has asked Ankara to extend the agreement by at least one year to allow time for further negotiations.
The two sides have been discussing a new agreement for a year, with Iraq insisting that the current one be extended by at least another year. The agency recalls that the Turkish side has reservations about the extension and wants it to be implemented under new conditions.
The oil pipeline contract in question has been in effect for several decades, and Ceyhan is a key export point for Iraqi oil, given that Iraq's main export terminal is suffering losses from the closure of the Strait of Hormuz after the US-Israeli strikes on Iran since late February.
Last year, Turkey announced the termination of the agreement regarding the pipeline and requested that it be renewed under new conditions. Turkey's proposal included a mechanism to ensure the full use of the pipeline, with the option of extending the route to southern Iraq.
The facility was temporarily suspended for two and a half years after an arbitration court ordered Ankara to pay $1.5 billion in compensation for unauthorized Iraqi exports to Turkey between 2014 and 2018. Its operation was restored at the end of 2025. The agency recalls that there is also a second arbitration case, covering the period after 2018, as well as a third case for the implementation of an arbitration award filed in a US court.
The pipeline, with a capacity of almost 1.5 million barrels per day, is operating significantly below its capacity due to security issues and other factors. According to the agency, in April this year, crude oil exports from Kirkuk to Turkey were 177,000 barrels per day.