Turkey proposed a new oil agreement with Iraq. The plan could expand refinery projects in northern Iraq. The draft includes four refineries with limited Turkish participation. The project aims to strengthen economic and energy cooperation.
Ankara links its investment to compensation for past losses from the Kirkuk–Ceyhan pipeline halt. The pipeline stopped crude flows after an international arbitration court ordered Turkey to pay Iraq $1.5 billion. The damages stem from unauthorized Kurdish exports. Since then, Baghdad lost an estimated $22–25 billion. Turkey absorbed at least $400 million in lost transit fees. It also pays about $25 million monthly for maintenance through BOTAŞ, its state pipeline company.
The draft also links oil cooperation to Iraq’s water quota from Turkey. It includes plans to expand trade and increase crude exports through Ceyhan. Both countries plan delegation visits in the coming weeks to finalize terms. The current transit agreement expires next year.
Exports from the Kurdistan Region resumed after more than two years. Around 190,000 barrels per day now move through Ceyhan. The tripartite agreement involves Baghdad, Erbil, and international companies. Iraq’s State Oil Marketing Organization (SOMO) manages the shipments. This ensures smooth operations and steady revenue for Kurdistan.
Experts say the new Iraq Turkey oil agreement could stabilize Iraq’s energy sector. It could also boost Turkish investment in refineries and logistics. Expanding refinery capacity would create local jobs. It would reduce reliance on imported refined products and support regional growth.
Analysts note that linking oil deals to trade and water reflects strategic planning. Iraq and Turkey aim to resolve disputes and open new channels for energy cooperation.
Observers expect negotiations to continue in the coming months. Baghdad and Ankara remain committed to securing energy flows, promoting investment, and resolving past disputes.