The Iraq-Turkey oil pipeline (ITP) has been closed since March 2023. Credit: Oleksii Liskonih via Getty Images.

Iraq’s oil ministry has blamed foreign oil companies for the delay in the resumption of crude exports through the ITP. The ministry said that companies had failed to submit contracts for revision.

Around 0.5% of global oil supplies once flowed through the ITP, but its operations have been halted since March 2023, after the Paris-based International Chamber of Commerce ruled Turkey had violated provisions of a 1973 treaty by facilitating Kurdish exports without the consent of the Iraqi Federal Government.

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Contracts signed with the Kurdistan Regional Government (KRG) have been ruled invalid by a court order, and the Iraqi Government is subsequently looking to revise such deals with businesses. It says foreign companies failed to submit contracts for revision on time, meaning it cannot reopen the pipeline.

“One of the main reasons for the pause in exports is the refusal of the foreign companies working in the Kurdistan Region to officially hand over their production to the Regional Government to be exported in accordance with the in-force federal budget law,” the oil ministry said in a statement.

Iraq continues to owe Turkey minimum payments – around $25m (ID32.72bn) per month, according to Wood Mackenzie – as long as the pipeline is technically operational. The Association of the Petroleum Industry of Kurdistan (APIKUR) has also said Iraq owes $800,000 in daily penalties.

APIKUR has encouraged President Biden’s administration not to procced with the planned visit of Iraq’s Prime Minister Mohammad Shia Al- Sudani to the White House in April unless the ITP is reopened, allowing oil produced in the Kurdistan region to be exported to international markets.

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In the planned visit, the US is looking to wean Iraq off Iranian power and gas. According to AKIPUR: “Iraq continues to receive sanctions waivers to import electricity from Iran, instead of funding its own energy infrastructure through additional oil exports.”