Turkiye seeks higher transit fees in new Iraq oil deal talks

Shafaq News – Baghdad/Ankara

Iraq and Turkiye have begun preliminary discussions on a potential new agreement to resume crude oil exports through the Turkish port of Ceyhan, according to the Iraqi economic observatory Eco Iraq.

The talks come amid Turkish demands to raise oil transit fees to $2.5 per barrel, significantly above the previous rate of $1 to $1.5.

Ali Naji, a member of the observatory, told Shafaq News that before exports were halted in 2023, Iraq had been pumping around 500,000 barrels per day (bpd) through the Kirkuk–Ceyhan pipeline, sourced from fields in both Kirkuk and the Kurdistan Region. Exports were suspended after Iraq won an international arbitration case against Turkiye for violating the 1973 pipeline agreement.

Naji said the current negotiations are still in early stages and have not yet reached formal talks or the drafting of a new agreement. He noted that the pipeline has a maximum export capacity of one million bpd, should it be restored to full operational levels.

The pipeline, one of Iraq’s oldest export routes to global markets, has faced repeated security and technical setbacks over the decades, including multiple sabotage attacks between 2004 and 2015 that caused extensive losses and disruptions.

On July 21, Turkish President Recep Tayyip Erdogan formally signed the termination of the historic oil accord with Iraq, which had been in effect since 1973.