Turkey will end the 1975 Iraq-Turkey Crude Oil Pipeline Agreement on July 27, 2026, halting all related protocols and memorandums, per a presidential decree published in Turkey’s Official Gazette. The move formalizes Ankara’s push to renegotiate the half-century-old framework governing the Kirkuk-Ceyhan pipeline, which has been idle since 2023 due to a $1.5 billion arbitration dispute over unauthorized Kurdish oil exports.
A senior Turkish official lamented the pipeline’s chronic underuse, stressing its potential as a "highly active and strategic asset" for regional energy security. Turkey has invested heavily in maintaining the 1.6 million-barrel-per-day infrastructure despite its two-year suspension and seeks a "new and vibrant phase" of cooperation with Iraq 147. The envisioned revival aligns with the Development Road initiative, a $17 billion rail-road corridor linking Basrah to Turkey which could extend the pipeline southward to boost Eurasian trade.
The pipeline’s closure stems from a 2023 International Chamber of Commerce ruling ordering Turkey to compensate Iraq for exports made without Baghdad’s consent by the Kurdistan Regional Government (KRG) between 2014–2018. While Turkey appeals the decision, technical talks to restart flows collapsed in March 2025 over payment mechanisms and contract terms between Baghdad, the KRG, and international oil firms. Iraq loses an estimated $1 billion monthly during the stoppage, crippling KRG finances.
The termination notice coincides with heightened instability: Iranian-backed drone strikes recently halted 200,000 barrels per day of KRG oil production. Meanwhile, the U.S. urges swift resolution, with State Department spokesperson Tammy Bruce emphasizing that reopening the pipeline would signal Iraq’s commitment to "putting its people first" amid investor skepticism. Ankara’s move pressures Baghdad to drop pending arbitration cases and finalize a modernized deal leveraging the pipeline’s role in the Development Road’s energy corridor ambitions.