Iraq’s Oil Lifeline Reopens — But Can Baghdad Trust Turkey for Even One Year?
With over 90% of Iraq’s annual budget still coming from oil exports and historically around 95% of that crude shipped through the Strait of Hormuz, securing an alternative export route while the Strait remains effectively blockaded has become an existential matter for Baghdad. Aside from the billions lost in immediate oil revenues for OPEC’s second-largest oil producer, the blockade meant Iraq’s…
After two and a half years of halted oil exports, Baghdad and Ankara have signed a one-year agreement to resume Iraqi crude through the northern Iraq-Turkey pipeline. This deal, signed in Ankara on August 1st, allows for an interim increase in oil flow to 750,000 barrels per day, nearly double the current 170,000-200,000 bpd. The pipeline, comprising two separate oil pipelines, is seen as a lifeline for Baghdad, filling domestic storage tanks and providing a new export route to European and American markets.
However, the deal may not last, as historical tensions between Baghdad and Ankara over oil sales from the Kurdistan Region persist.
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