Turkiye and Iraq sign oil pipeline deal for 750,000 barrels daily

Turkiye and Iraq signed a one-year agreement on August 1, 2026 to maintain crude flows through the Kirkuk-Ceyhan Oil Pipeline, securing Iraq’s sole functioning Mediterranean export route at a time when Gulf shipments have been crippled by Iran’s effective closure of the Strait of Hormuz.

The deal, struck between Turkish state firm BOTAS and Iraq’s state oil companies SOMO and NOC, replaces a decades-old bilateral arrangement that expired on July 27. It came four days after Turkish President Recep Tayyip Erdogan hosted Iraqi Prime Minister Ali al-Zaidi in Ankara.

Turkish Energy Minister Alparslan Bayraktar, who met Iraqi Oil Minister Bassem Mohammed Khudair in Ankara before the signing, said the transit arrangement covers a daily capacity of 750,000 barrels. “While our efforts continue toward a new long-term agreement for this pipeline … we have implemented this transit arrangement,” he wrote on X.

Al-Zaidi described the deal as “an important strategic milestone” in a separate post, adding that both governments would work toward a broader framework agreement covering oil, electricity, water resources and other cooperation.

Global oil market disruptions lent the agreement added urgency. U.S. and Israeli strikes on Iran in late February 2026 led to the effective closure of the Strait of Hormuz, causing Iraqi oil exports to collapse by more than 80 percent. Monthly revenues plunged from around $6 billion to under $2 billion as Gulf shipments stalled.

The Kirkuk-Ceyhan pipeline has a maximum capacity of about 1.5 million barrels per day, but at the time of signing it was carrying only around 170,000 bpd, according to Turkish data, mostly from fields in Iraq’s Kurdistan region — which have themselves faced repeated attacks since the conflict with Iran began.

Ankara seeks eventually to extend the pipeline to carry crude from Iraq’s southern fields, and both sides confirmed that talks on a longer-term deal are ongoing.