Turkey said a key pipeline bringing oil from northern Iraq to the Mediterranean coast can resume this week, though an Iraqi official cast doubt on that timetable.
(Bloomberg) — Turkey said a key pipeline bringing oil from northern Iraq to the Mediterranean coast can resume this week, though an Iraqi official cast doubt on that timetable.
The pipeline — which carries almost half a million barrels of crude a day — has been offline since March amid a payment dispute between Ankara and Baghdad. Turkey has also said repairs following damage from an earthquake are complete.
“The pipeline is ready to operate and within this week, we will start operating the Iraqi-Turkey pipeline, which after resuming operations will be able to supply half a million barrels” of oil a day to global markets, Turkish Energy Minister Alparslan Bayraktar said in Abu Dhabi on Monday.
An Iraq official said oil flows can’t resume until commercial and financial issues have been resolved.
A return would bring some relief for oil market after curbs by the Organization of Petroleum Exporting Countries and its allies have squeezed supply and pushed crude prices toward $100 a barrel. Crude prices rose following Turkey’s comments, but gave up much of those gains.
Also read: Turkey Says Iraq Oil Pipeline ‘More or Less Ready’ After Audit
Ankara has been refusing to pay a $1.5 billion fine that was awarded to Iraq by an arbitration court for transporting oil from Kurdistan without Baghdad’s approval. Turkey has indicated it has no intention of paying damages and has asked the Kurds to do it instead.
The pipeline’s shutdown has already cost producers and government coffers nearly $5 billion, Safeen Dizayee, the foreign minister of the semi-autonomous Kurdistan Regional Government said in an interview May 15.
Baghdad also wants its oil marketing company SOMO to play a role in overseeing sales from the semi-autonomous Kurdistan, a previous sticking point that’s already been agreed with the Kurdistan Regional Government. There’s also the issue of managing deals previously signed between the KRG and oil companies.
–With assistance from Firat Kozok and Khalid Al-Ansary.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.