Pipeline restart and the deal behind it

Crude exports from Iraq’s Kurdistan region to Turkey’s Ceyhan terminal restarted for the first time since early 2023, reopening a major Mediterranean route that had been halted after arbitration and payment disputes. The interim framework among Baghdad, the Kurdistan Regional Government and private operators enables initial flows around 180,000–190,000 barrels per day with scope to rise above 200,000 bpd. Sales from Ceyhan will be handled by an independent trader, with a portion steered to an escrow account to clear arrears and allocate revenues across stakeholders. The restart follows months of talks to align export rights with federal marketing via SOMO while preserving KRG budget needs.

Energy market ripple effects

The added sour barrels help European refiners diversify ahead of winter maintenance, while Turkey regains transit fees and strategic leverage. For producers, sustainable throughput hinges on timely payments and clarity over legacy debts said to approach $1 billion. Any slippage in the escrow mechanism, legal challenges, or infrastructure bottlenecks could dent volumes. Regional stability also matters: a cross-border security flare-up would threaten pumping schedules and shipping insurance rates. If the framework holds, the resumption may serve as a template for reconciling subnational resource claims with federal revenue-sharing in other oil states.