Turkey Tightens Grip on Iraq’s Energy Lifelines

Turkey halted 600 MW of electricity exports into northern Iraq last week after Baghdad fell behind on payments, leaving Nineveh and Mosul short at peak summer demand. This is happening alongside the 2-year+ shutdown of the Iraq-Turkey (Ceyhan) pipeline. That stoppage stems from the Paris arbitration ruling against Ankara, but it now functions as a bargaining chip. Ankara wants Baghdad to settle the $1.5 billion award, agree to new terms on pipeline throughput, and open space for Turkish firms in Iraqi power and gas projects. 

For Erbil, it’s tricky. Without independent pipeline exports, the KRG is financially constrained. Turkey controlling both oil transit and electricity supply weakens Kurdish leverage in negotiations with Baghdad. Ankara has signaled it views all of these issues (power sales, pipeline restart, water releases) as part of a single package. The net effect is that Turkey is steadily reducing Iraq’s fallback options. 

Baghdad and Erbil cannot stabilize either oil revenues or electricity supply without Ankara’s cooperation. That’s why we are seeing a lot of media about Baghdad and Erbil coming to an agreement to restart exports through the Iraq-Turkey pipeline, but then not seeing that happen in reality. Ceyhan remains shut. The pipeline has been offline since March 2023 following the ICC ruling against Ankara, and Turkey is still pursuing legal cover before reopening. 

There has been no visible terminal preparation or loading activity. Baghdad and Erbil continue to move paperwork. Revenue-sharing language, SOMO marketing control, and budget transfers to the KRG have advanced, and delegations are still meeting. None of this has produced export barrels. Ankara’s position hasn’t shifted. Turkey wants settlement of the arbitration award, explicit legal insulation against future claims, and higher, steadier throughput under a broadened energy package. That package links crude transit with electricity, gas, and project participation. Operators have not committed volumes. Companies want written guarantees on marketing, payment mechanics, and contract treatment, plus clarity on security and pipeline integrity. Until Ankara’s package is agreed and operators have those guarantees, expect announcements about progress without loadings.