Turkey and Iraq Extend Oil Pipeline Deal, Secure Key Exports Route
Turkey and Iraq have reached an agreement to extend their oil pipeline deal by one year, ensuring continued supply through a key exports route that bypasses the Strait of Hormuz. The deal allows for a 'reserved' export capacity of up to 750,000 barrels per day, contingent on security improvements and increased production in Iraqi Kurdistan.
The agreement comes after Turkey invested in upstream production in Kirkuk and took a 15% stake in BP Energy Company's consortium redeveloping oil fields in the region. A new pipeline connecting Basra to Kirkuk is underway, expected to increase Iraq's export capacity through the Ceyhan pipeline.
Flows along the Kirkuk-Ceyhan pipeline had been disrupted by a legal dispute between Turkey and Iraq, but resumed last September after a two-and-a-half-year pause. The deal secures supply for oil markets that have been affected by disruptions through the Strait of Hormuz.