ERBIL, Kurdistan Region - Iraq’s Ministry of Oil on Saturday welcomed a decision from an arbitration court in Paris that ruled in Baghdad’s favour against the Kurdistan Region’s independent crude oil exports through Turkey.
“The Ministry of Oil welcomes the final verdict in favour of Iraq which was issued by the International Chamber of Commerce in Paris last Thursday, March 23, 2023,” reads the statement.
The arbitration court ruled that Turkey had breached a 1973 pipeline agreement between Iraq and Turkey obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq. In 2014, the Kurdistan Regional Government (KRG) began using the pipeline to send its crude to Turkey’s Ceyhan port, to the ire of Baghdad.
Under the court ruling, the Iraqi government, via the State Oil Marketing Organization (SOMO), is the only party in charge of the management of export operations through Turkey’s Ceyhan port related to Iraqi oil, the ministry stated.
“The Ministry of Oil clarifies that it will discuss the mechanism of exporting Iraqi oil through Turkey’s Ceyhan port with the concerned entities in the [Kurdistan] region and the Turkish authorities… in order to guarantee the continuity of oil exports,” the ministry said.
According to a Reuters report, citing an unnamed senior Iraqi oil official, Iraq suspended exports of Kirkuk oil through the pipeline to Turkey. It also reported that Turkish authorities had informed Iraqi employees at the port that Ankara will no longer allow KRG’s crude to be loaded onto ships at Ceyhan port without permission from Baghdad.
Reacting to the verdict, the KRG’s Ministry of Natural Resources said it will not affect ongoing talks with the federal government, adding that they have reached a preliminary agreement on budget, oil and gas issues and will continue to pursue the matter until a constitutional solution is reached.
“The French court’s verdict in favour of the Iraqi government against Turkey will not be an obstacle in front of the ties with Baghdad’s government,” reads the statement.
Kurdistan Region Prime Minister Masrour Barzani said a delegation will travel to Baghdad for talks on Sunday. “Our recent understandings with Baghdad have laid the groundwork for us to overcome the arbitration ruling today,” he tweeted.
The Kurdish government is heavily reliant on its revenues and an inability to sell its crude will severely impact its already struggling economy. The government has failed for years to pay its over a million civil servants on time and in full.
The Iraqi oil ministry said that the court decision will not affect ties with Turkey.
Updated at 8:40 pm
