Turkey is demanding that the Kurdistan Regional Government (KRG) pay the compensation Turkey owes Iraq for exporting oil from the Kurdistan Region of Iraq (KRI) without the approval of the federal government.
Citing Turkish officials, Bloomberg News reported that Turkey considers this an internal Iraqi issue and is trying to facilitate an agreement between Iraq and the KRG on oil exports through its port of Ceyhan.
The International Chamber of Commerce (ICC) earlier this year ordered Turkey to pay around $1.5 billion in compensation for the unauthorised export of oil from the KRI between 2014 and 2018. As a result of the ruling on 22 March this year, Turkey halted shipments through the Kirkuk-Ceyhan pipeline on 25 March.
Turkey’s demands and conditions
Despite five months of negotiations between Baghdad and Ankara, no solution has yet been reached involving Turkey. Discussions on the resumption of Kurdistan’s oil exports are ongoing.
Iraqi Oil Minister Hayan Abdulgani travelled to Ankara on 22 August to discuss the issue, and held talks with Turkish Energy and Natural Resources Minister Alparslan Bayraktar. Although no agreement was reached, the ministers agreed to continue discussions.
An official from the Iraqi Oil Ministry, speaking to Bloomberg, noted that it is difficult to reach an agreement in the short term because of various complex issues. The official mentioned that Turkey has specific demands and conditions, and discussions on these conditions need to take place before oil flows can resume.
Analysts suggest that Turkey is seeking an Iraqi government stance against the Kurdistan Workers’ Party (PKK) as a condition for accommodating Iraq’s oil and water demands. This continued precondition was evident during the recent visit of Turkish Foreign Minister Hakan Fidan to Iraq, which included a stop in Erbil (Hewlêr).
Bayraktar travelled with Fidan to Erbil, and the two men met with Prime Minister Mesrour Barzani and other officials from the Kurdistan Region during the visit.
Impasse in Kurdistan oil export dispute
The Kurdistan Regional Government began exporting crude oil in 2013, independently of the federal Iraqi government. However the Baghdad government, considered this act unlawful, and in 2014 accused Turkey of violating the Crude Oil Pipeline Agreement signed in 1973, leading to a referral to the ICC as an arbitrator.
In February 2022 a year before to the ICC’s decision, the Federal Supreme Court of Iraq ruled that the Kurdistan Region must hand over all oil and natural gas revenues to the central government in Baghdad. The Kurdistan Regional Government, however, dismissed the court’s ruling as “political” and refused to recognise it.
The Iraqi government submitted a second case to the ICC against Turkey for the period after 2018. It is anticipated that this second case will take another two years to conclude.
