Turkiye-Iraq Pipeline: End of an era, dawn of a new energy game
Turkiye's decision to formally terminate its decades-old oil pipeline agreement with Iraq marks a pivotal shift in regional energy dynamics. Despite multiple rounds of negotiations between Turkish and Iraqi officials to extend the arrangement, President Recep Tayyip Erdogan announced the deal's formal end—effective July 27, 2026.
The move signals the closure of a longstanding framework and opens the door to a redefined partnership shaped by unresolved legal, economic, and political tensions involving Baghdad, Erbil, and Ankara.
A 50-Year Framework Nears Its End
The 1973 agreement established the legal basis for the Kirkuk–Ceyhan crude oil pipeline, allowing Iraqi exports to flow through Turkish territory to the Mediterranean. Ratified in 1975 and amended several times—in 1976, 1981, 1986, and most notably in 2010—the agreement underpinned Iraq's northern export strategy.
The 2010 protocol extended the deal by 15 years and introduced a critical clause: commercial disputes would be resolved under French law via the International Chamber of Commerce (ICC) in Paris. This provision later became the cornerstone of Iraq's legal challenge.
Between 2004 and 2015, the pipeline sustained more than 20 attacks in Nineveh and Kirkuk, often targeting key pumping stations such as IT-1, IT-2, Ain al-Jahsh, and Fishkhabour. The violence intensified during ISIS's territorial gains in 2014, disrupting exports for prolonged periods.
Pipeline as Power: Sovereignty and Leverage
For Baghdad, the pipeline was more than infrastructure—it was a matter of sovereignty. The federal government insisted that only the State Oil Marketing Organization (SOMO) was legally authorized to export crude oil. After 2014, independent exports by the Kurdistan Regional Government (KRG) were repeatedly declared unconstitutional by Iraqi officials.
With federal flows disrupted by the conflict with ISIS, the KRG increasingly depended on the Kirkuk–Ceyhan line between 2014 and 2017, paying Turkish firms tens of millions of dollars annually in transit fees. But that reliance came at a cost. Sabotage-induced shutdowns cost the Region hundreds of millions in lost revenues—around $300 million between 2014 and 2015—worsening fiscal pressures and deepening disputes with Baghdad.
Turkiye, meanwhile, leveraged the pipeline as a source of income and geopolitical influence. As the transit state, Ankara profited from fees and strengthened its position as a regional energy hub—connecting Iraq's northern resources to global markets while gaining influence over both Baghdad and Erbil.
Arbitration and Agreement Breakdown
In 2014, Iraq filed for international arbitration, accusing Turkiye of violating the 2010 protocol by facilitating unauthorized oil exports from the KRG. Baghdad claimed this undermined national sovereignty and resulted in economic losses through price manipulation and excess payments.
In March 2023, the ICC ruled in Iraq's favor and ordered Turkiye to pay $1.47 billion in damages. Although the ruling did not cancel Ankara's contracts with the KRG, it reaffirmed Baghdad's exclusive authority to approve oil exports. Turkiye subsequently suspended flows through the Kirkuk–Ceyhan pipeline on March 25, 2023.
Invoking Article 9 of the 2010 amendment, which allows for termination with one year's notice, President Erdogan later confirmed the deal would expire in 2026. Iraq's Ministry of Oil stated that the Turkish decision aligned with the agreement's legal terms and noted that negotiations for a new framework began in mid-2024.
Fiscal Strain and Political Pressure in Kurdistan
The suspension of exports had severe consequences for the Kurdistan Region. Revenues collapsed, public sector wages were delayed, and international oil companies operating in the Region were owed over $1.7 billion. The resulting financial distress triggered public protests in cities like Erbil and Al-Sulaymaniyah and exposed the Region's continued vulnerability to infrastructure it does not control.
To manage the fallout, Baghdad and the KRG reached a new interim deal in July 2025. Kurdistan agreed to deliver 230,000 barrels per day to SOMO, while Baghdad resumed budget transfers and approved a fixed $16-per-barrel transport fee. While the deal provided short-term relief, it also reinforced the Region's structural dependence on decisions made outside its borders.
Inside the Kurdistan Region, the crisis has intensified political pressure on the regional government. The halt in independent exports and the resulting fiscal strain have sharpened internal criticism and revived debates over energy strategy, transparency, and governance.
Pipeline Ready, Politics Frozen
Iraq's North Oil Company confirmed that the Kirkuk–Ceyhan pipeline has been fully repaired, and three rounds of pumping tests validated its operational readiness. However, political disagreements have kept it offline. Despite its technical functionality, the pipeline remains caught in a broader diplomatic impasse.
Regional Energy Shifts and Strategic Diversification
With its northern exports suspended, Iraq has begun actively exploring alternative corridors. Talks have resumed on reopening the Kirkuk–Baniyas line through Syria, progress continues on the Basra–Aqaba route to Jordan, and Baghdad is examining the potential revival of the old Tapline through Saudi territory. These moves signal a deliberate effort to reduce dependence on the Turkish route and regain strategic flexibility.
For Turkiye, the decision to end the 1973 deal is part of a broader recalibration. Energy analyst Ali Abdullah noted that Ankara aims to break free from 'legacy constraints' and reshape its ties with Iraq on modern, multidimensional terms—anchored in infrastructure, trade, and regional influence.
Power, Leverage, and Legal Overhang
Economic expert Hassan Youssef described Turkiye's move as a 'strategic lever.' According to Youssef, Ankara is seeking to widen the scope of negotiations beyond oil into broader domains of cooperation, including reconstruction contracts and commercial access.
He cautioned, however, that political disputes could delay a comprehensive resolution and stressed the need for sustained strategic dialogue to protect Iraq's oil sector from prolonged uncertainty.
Corruption Allegations and Informal Networks
Further complicating the situation are longstanding allegations of corruption. Investigative reports, including by Nordic Monitor, claim that 'Powertrans'—a Turkish firm allegedly connected to President Erdogan's inner circle—benefited from exclusive contracts to operate the pipeline on behalf of the KRG. These allegations raise questions about past arrangements and the informal networks that have influenced energy policy decisions.
Between Transition and Uncertainty
For Baghdad, the end of the 1973 pipeline agreement offers a chance to break free from an outdated framework that limited its control over northern exports. But without credible alternatives in place, the fiscal and logistical impact remains significant.
Oil expert Hamza al-Jawahiri pointed out the economic rationale behind Baghdad's shifting priorities: exporting via Ceyhan costs over $6 per barrel, while the southern route costs only $0.60—making the north unviable unless terms are renegotiated.
For the Kurdistan Region, the termination renews fiscal pressure and leaves the Region increasingly exposed to decisions made in Ankara and Baghdad. The export halt since 2023 has deepened structural dependency and strained political ties with the federal government.
As both Iraq and Turkiye prepare for a new phase of energy diplomacy, the broader stakes extend beyond bilateral agreements. The evolving dynamic will shape regional infrastructure investments, redraw energy alliances, and test whether legal frameworks or political leverage will define the next era of cooperation.
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Does the model of the Autonomous Administration of North and East Syria (Rojava) strengthen the common life of the communities? William Roebuck: It's a good question. Obviously, there are significant tensions in Syria, not only in the northeast, but in other parts of the country. I think a certain degree of decentralization makes sense. And obviously with decentralization, you need local government, something similar to what you have with the autonomous administration. However, ultimately these issues will have to be resolved with the national government in Damascus. This is what the United States is insisting on. And so this has to be done through negotiation. And I don't know exactly what the national government, the Ahmed al-Sharaa government, will accept in terms of an autonomous administration remaining behind. It'll have to be a part of the discussion of integrating the SDF into the national government. 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And I think they can certainly negotiate for as much autonomy, as much decentralization as possible. I think this is what they should try to do. All I'm saying is that it will be a compromise. And the other side, the national government, has their position. Hopefully, the United States and France, I think, who's also involved a little bit in this, but certainly the United States is a key player, that they will help the two sides reach a compromise that is fair and that strengthens stability in Syria for all of its people, its majority population, but also its minority populations. Is Tom Barrack's support for the centralization of Syria the official view of the US government? I think that US Special Envoy for Syria, Ambassador Barrack speaks with great authority for the views of the United States government right now. He's a very close associate of President Trump who has a lot of confidence in him. So I think if you hear him say what the position of the United States is on these issues, you should accept that what he says represents a very authoritative expression of those views. So we understand from your statements and Barrack's remarks that Syria is heading towards centralization? I think it's going to vary a little bit. I think on the military side, I think it will look more like a central type system on the governance set. At the local level, local governments, like in various cities and towns, there might be more decentralized authority. That remains to be seen. I think the focus of the negotiations so far have been heavily on the military side. And I suspect on that aspect, there is likely to be more centralized command and control. This is just the way a military works. It's very difficult to have a decentralized military command and control structure. Now, what the specifics of that is and how the SDF and its leadership command structure would be integrated, I don't know the details of that. I think those details will need to be worked out between the Sharaa government and the SDF. Dear William, I want to get your opinion. You were the US special representative in the international coalition against ISIS. You were also the deputy US representative for Syrian affairs. At this stage, when ISIS is still a threat, how necessary is the existence of the SDF? Obviously, the fight against ISIS is very important. It's one of the reasons for the existence of the Syrian Democratic Forces. And I should say that as someone who was on the ground in northeast Syria for several years, I know how effective the SDF was as a partner with the US in the fight against ISIS. Very, very effective. No question about that. For the future, you know, it's difficult. I think ultimately there's going to need to be a significant level of integration of the SDF into a Syrian national military. And I think that is going to be a challenge for the SDF, but it's a challenge that they will need to find ways to cope with. And circumstances in Syria and in northeast Syria are changing. And this is what a good leadership does. It meets those challenges head on and finds a way forward that retains something of the previous, the traditional ways that things were organized, and also accepts the new terrain, the new territory, the new way of doing things. And this is what the SDF is going to have to do. The question is also this: do the pressures for the SDF's integration into the Syrian army increase the risk of ISIS's return? Yes, I think it's very possible that there will be a further resurgence of ISIS. This is a big risk and a big danger, and this is why the SDF and its presence in the northeast is so important, its cooperation with the United States. And I hope that this cooperation will continue. It's been a very valuable partnership. Overall, the capabilities of ISIS are increasing, I think. They're still somewhat limited compared to the height of their power and influence back in 2016 and '17. But I do think that they are trying to strengthen their activities and trying to strengthen their leadership cadres. And it's very important that the SDF and the US together stay focused on this threat that ISIS poses. What should the US government do to protect the structure of the SDF? We'll have to see how this plays out. I mean, right now, US forces remain in northeastern Syria. So they have some, in English we call it leverage, some ability to shape the situation and I think the US should use that leverage to help the SDF negotiate an agreement that is, that respects their interests to the degree that the United States is able to do that. Ultimately, Ambassador Barrack has made clear in his public remarks that the US will eventually leave. It will withdraw from Syria. It just, it hasn't made clear the timeline for that withdrawal. I think it's not in the short term, but beyond that, in the intermediate, the longer term, eventually the US is going to withdraw. So it is important that the SDF, while the US is there, it's important that the SDF find the right balance, the right compromise to make with the national government in Damascus that respects the SDF's interests while also respecting the needs of the national government. Dear William Roebuck, you are now the deputy president of the Arab Gulf States Institute. How do the Gulf countries view the role of the SDF and the future of northeast Syria? I think they understand that the Syrian Democratic Forces have been a very important force in the fight against ISIS. They understand the SDF was absolutely instrumental in the defeat of ISIS in the SDF and in the northeast and in the region around the northeast. So the Gulf countries do understand this and I think they appreciate this. I think right now, to be honest, the Gulf countries are more focused on what is going on in Damascus and what needs to be done for the reconstruction and rebuilding of Syria. Where are the right investments to make? How can they assist with humanitarian or broader assistance, those types of things in helping the Syrian government exert authority and stability over the country? These are the types of things. I noticed today, for example, the Saudis have a very large trade delegation in Damascus. This is their focus that they've signed a $6 billion memorandum of understanding for investment. And this is the second visit like that in the last six weeks for the Saudis. Obviously other countries are involved, the Emiratis have been involved in signing an $800 million port deal to help renovate the port of Tartus. So there's a lot of Gulf interest in investing and helping the Syrian government in reconstruction. Dear William, if you were now the US representative for Syrian affairs, what advice would you give to the US government? I would advise them on understanding the SDF position, to appreciate the many sacrifices and achievements that the SDF accomplished with the United States and with the special forces, American special forces that worked very closely with them in the northeast over the last number of years, since they started this partnership back in 2015-16 timeframe. It's been almost a decade. It's amazing. And I think so far, what Ambassador Barrack has indicated in his remarks, that he does understand this, he does understand. But I think it's very important, if I were advising them, as you ask, this is what I would emphasize. Help them make a good deal. Work fairly with both sides, but also appreciate the sacrifices that the SDF made over the last decade to pursue US interests in Syria against ISIS.
