Iraqi Oil Supply Halt: Turkey Unlikely to Resume Operations Until October

Turkey is unlikely to resume Iraqi oil supplies before President Recep Tayyip Erdoğan’s possible visit to Baghdad in October. According to the British news agency Reuters, sources say that President Erdoğan will likely visit Baghdad in October after his planned visit in August was postponed.  Iraqi Oil Supply Halt: Turkey Unlikely to Resume Operations Until October

On March 25, Turkey halted the export of oil from northern Iraq following an arbitration decision by the International Chamber of Commerce. The ruling ordered Ankara to pay $1.5 billion in damages to Baghdad for unauthorized exports by the Kurdistan Regional Government (KRG) between 2014 and mid-2018.

In April, Iraq applied to the U.S. federal court to enforce the ICC arbitration award. One of the reasons Erdoğan postponed his August visit was the lack of progress in resolving the litigation, sources said. “Erdoğan still plans to visit Baghdad and wants an agreement to be signed, but the concrete steps expected by Iraq have not been taken so far,” a senior Turkish official said.

The sources added that one of the steps Ankara is trying to take is to stave off U.S. legal action, and that Erdoğan’s visit is scheduled for October as a result. An official from the Iraqi Foreign Ministry stated, “We have not yet received a definitive timeline from Ankara on when the Turkish president will visit Baghdad. It is also possible at the end of this month, or more likely in October.”

An Iraqi official with knowledge of the talks mentioned that officials in Baghdad and Ankara are discussing complex issues, the most difficult of which is oil supply. He added that it is unlikely the supply of oil will resume this month.

Two Iraqi officials said that Turkey had also tried to negotiate a deal to reduce the reparations it had to pay to Iraq under ICC mediation. Iraqi sources have previously stated that Turkey wants Iraq to conclude the second export arbitration case during the post-2018 period.

Turkey’s energy ministry did not immediately respond to a request for comment. It should be noted that Saudi Arabia has decided to continue the policy of a voluntary reduction of 1 million barrels per day in oil production until December 2023 to stabilize the oil market.

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