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HomeNewsEconomyIraq-Turkey oil pipeline restart delayed by payment disputes

Iraq-Turkey oil pipeline restart delayed by payment disputes

The northern-Iraq-to-Turkey pipeline was shut down in March 2023, following an arbitration court order for Turkey to pay Iraq US$1.5 billion in compensation. This disagreement over payments has resulted in the delay of reopening the key pipeline, causing a monthly revenue loss of almost $1 billion for the Kurdistan Regional Government and companies in the region. About half a million barrels per day of crude oil have been kept from entering the global market due to this closure.

Iraqi Prime Minister Mohammed Shia Al-Sudani mentioned that oil companies are facing issues with the cost of producing barrels, further complicating the situation. Despite Turkey’s announcement that the pipeline was ready for operations in October, the decision to resume flows has been left to Iraq. This delayed progress has helped Iraq adhere more closely to its OPEC+ production limits but will require a reduction in output by approximately 300,000 barrels per day.

In addition, Baghdad has requested Kurdistan to reduce its output to help Iraq comply with its OPEC+ limits. Meanwhile, oil companies in Kurdistan have expressed readiness to discuss resuming supplies through the pipeline, although Baghdad does not recognize their production contracts with the KRG.

The federal government of Iraq is considering a budget amendment to enable Baghdad to pay international oil companies operating in Kurdistan. The article can be accessed online at: https://www.worldpipelines.com/business-news/19012024/disagreements-over-payments-holds-up-iraq-turkey-oil-pipeline-restart/

World Pipelines is not responsible for the content of external internet sites.

Source: https://www.worldpipelines.com/business-news/19012024/disagreements-over-payments-holds-up-iraq-turkey-oil-pipeline-restart/

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Author: Turkish News