Following a deal between Iraq’s federal government and the Kurdistan Regional Government (KRG), northern oil exports through Ceyhan are planned to resume and Baghdad will write to Turkey to restart pipeline flows, according to a report from Reuters.
After Iraq, OPEC+ second oil producer, won the international arbitration case on March 25, Turkey stopped pumping about 450,000 barrel-per-day of Iraqi crude from a pipeline from the Fish-Khabur boarder area to its Ceyhan port. Iraq’s KPG began exporting oil to Ceyhan independently from the federal government in 2013, a move Baghdad deemed illegal.
“This agreement will remain in effect until the oil and gas law bill is approved by Iraqi Parliament,” said.
Iraq’s oil ministry in Baghdad said it hopes to reach a final agreement soon with the KRG on resuming northern oil exports.
The northern route via Turkey inly accounts for about 0.5% of global oil supply, but the stoppage, which forced oil firms operating in the region to halt output or move production into rapidly-filling storage tanks, still helped boost oil prices last week back to near $80/bbl.
To resume pipeline flow from Iraq’s semi-autonomous Kurdistan region, Turkey needs to approve.
“A letter of request to resume oil flows will be sent by Baghdad to Ankara,” a KRG official told Reuters on Sunday