Turkey wants to negotiate a deal with Iraq that it has been ordered to pay for before a pipeline exporting 400,000 barrels a day is reopened, according to two Turkish officials familiar with the situation.
A legal dispute between the two countries halted a pipeline carrying crude from semi-autonomous Kurdistan on March 25. Baghdad, which has for years claimed control of Kurdish exports, agreed with the regional government this week to resume shipments. But it could be delayed by payments Turkey owes to Iraq, adding to concerns about tight global oil supplies after big OPEC+ production cuts.
Turkish officials, who spoke on condition of anonymity, declined to say whether the country is seeking to reduce compensation or determine a mechanism for making the payments. The Kurdistan Regional Government has said it could restart supplies this week, but any negotiations could halt the process.
An international business court awarded Iraq $1.5 billion in net compensation, following a ruling last month that Turkey breached an agreement by allowing crude to be exported from Kurdistan without Baghdad’s consent, according to a statement by the March 30 of lawyers who represented the country. . Turkey has not commented on the amount.
The Turkish government declined to comment, and Iraq’s oil ministry did not immediately respond to a request for comment. “The federal government must take the necessary measures and actions to ensure that Turkey will restore oil exports,” said Lawk Ghafuri, head of foreign media relations for the Kurdistan Regional Government.
–With assistance from Verity Ratcliffe and Khalid Al-Ansary.
