Pipeline dispute exposes Iraqi-Turkish tensions

A year since Ankara stopped important repairs and operations on the Iraq-Turkiye oil pipeline, Iraq’s Ministry of Oil last week accused foreign oil companies with a presence in Iraqi Kurdistan of interfering in internal Iraqi affairs. Less than a month after the Association of the Petroleum Industry of Kurdistan stated that there was no deal in place to resume oil exports from northern Iraq to Turkiye, this development is the latest issue in a wider catalogue of legal and financial disputes that exist between the two countries.

They agreed in 1973 to establish an Iraq-Turkiye pipeline that would connect the Kirkuk oil fields with Turkiye’s southern Ceyhan port. Though the agreement was originally signed between the governments of Turkiye and Iraq, the production sites today fall within the autonomous territory of Iraqi Kurdistan. It initially consisted of two pipes, but one was damaged and eventually fell out of use, thereby hampering Iraq’s capacity to provide the agreed minimum volumes of supply.

Though it was agreed that the functioning pipeline would be used exclusively for Iraqi crude oil, in 2013 the Kurdistan Regional Government built an offshoot pipeline to export oil from within its territory to Turkiye. Several legal disputes have since ensued, as the Baghdad government claimed that this violated the terms of the original agreement between Iraq and Turkiye.

Bilateral relations continue to face major obstacles, especially given the presence of the PKK in Iraqi Kurdistan

Zaid M. Belbagi

In March 2023, the pipeline that once exported 450,000 barrels of crude oil per day, some 0.5 percent of the global oil supply, was shut down as the International Court of Arbitration ruled in favor of the Iraqi claim. This closure has caused significant economic loss for Iraq, with the Association of the Petroleum Industry of Kurdistan estimating a monthly loss of $1 billion. Separately, it is claimed that Iraq owes Turkiye nearly $25 million per month for the period that the pipeline technically remains operational. At the same time, the International Court of Arbitration instructed Turkiye to pay more than $1.5 billion to Iraq as damages for what it deemed to be illegal exports. Nevertheless, the two sides are far from a resolution as the bills mount for both parties.

The latest dispute comes at a time when OPEC+, of which Iraq is a part, has reaffirmed its decision to reduce oil supply to sustain prices. Given Iraq’s recent announcement that it would maintain a low supply of 3.3 million barrels per day in line with the strategy of the group, it is unlikely that production and supply along the Iraq-Turkiye pipeline will resume in the short term.

Bilateral relations between Turkiye and Iraq continue to face major obstacles, especially given the presence of the PKK in Iraqi Kurdistan. This Kurdish militant group has been designated as a terrorist organization by the Turkish government, which blames Iraq for allowing the PKK to maintain cross-border influence over Turkiye’s Kurdish regions. Comprising well over 15 percent of the population and located primarily in the country’s east, along the Syrian, Iraqi and Armenian borders, the Kurds are the largest ethnic minority in Turkiye and a subject of intense focus by successive Turkish governments. It concerns Ankara that the PKK has sustained its presence in Iraqi Kurdistan despite its strained relations with both the Baghdad and Irbil governments.

A water-sharing dispute in the Euphrates-Tigris basin has further negatively impacted Turkiye-Iraq relations

Zaid M. Belbagi

Water security is another growing bilateral concern, as the region is warming faster than the global average. A water-sharing dispute in the Euphrates-Tigris basin has further negatively impacted Turkiye-Iraq relations. The basin stretches across more than 35,000 sq. km in Turkiye, Iraq, Iran and Syria and tensions have arisen over the construction of more than 40 dams and hydroelectric power plants as part of Ankara’s Southeastern Anatolia Project.

Turkiye’s downstream neighbors, such as Iraq, are concerned with the pressure exerted by these projects on the rivers’ already limited water supply. Estimates have indicated that such construction has reduced Iraq’s water supply from the two rivers by 80 percent over the last 40 years and some experts believe that both will be dry by 2040.

Efforts to introduce a minimum water-sharing commitment from Turkiye have been welcome but remain vague and dependent on Ankara’s cooperation. It is also understood that, given the wider geopolitical context, Turkiye is using this issue as a means to exercise control over Kurdish militant groups and Islamist groups in Syria and Iraq.

Though disputes persist concerning the supply of oil and water sharing, there are distinct opportunities for security cooperation between Iraq and Turkiye. The two countries are important neighbors. Moreover, Turkish President Recep Tayyip Erdogan increasingly needs the perceived successful resolution of bilateral crises as an opportunity to direct attention away from the losses suffered by his ruling Justice and Development Party in the local elections in Turkiye last month.

There are already indications of emerging security cooperation between the two countries. Turkiye’s foreign minister, defense minister and National Intelligence Organization director last month visited their counterparts in Baghdad to strengthen bilateral security cooperation. The joint statement released afterward underlined the countries’ shared commitment to deterring the PKK’s operations. Iraq has also shown a willingness to join Turkiye in the establishment of a joint operations center against the PKK. This is expected to be explored further during Erdogan’s planned visit to Baghdad after Ramadan, which could also precipitate collaboration on the Iraq-Turkiye pipeline.

• Zaid M. Belbagi is a political commentator and an adviser to private clients between London and the Gulf Cooperation Council region. X: @Moulay_Zaid