In a bid to reopen an oil pipeline that exports 400,000 barrels per day, Turkey is looking to negotiate with Iraq to settle the compensation it was ordered to pay. The pipeline, which carried crude from semi-autonomous Kurdistan, was halted on March 25 due to a legal dispute between the two countries. However, following an agreement between the regional government and Baghdad to resume shipments, Turkey’s outstanding payments to Iraq could delay the process, adding to concerns over tight global oil supplies in the wake of significant OPEC+ output cuts.
According to two Turkish officials who spoke on the condition of anonymity, negotiations could determine whether Turkey would reduce the compensation or establish a mechanism for making the payments. Although the Kurdistan Regional Government has said it could resume supplies this week, negotiations could hold up the process.
An international business tribunal awarded Iraq a net compensation of $1.5 billion last month after ruling that Turkey breached an agreement by allowing crude from Kurdistan to be exported without Baghdad’s consent. Turkey has not commented on the amount it owes.
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The Turkish government declined to comment on the negotiations, and Iraq’s oil ministry did not immediately respond to a request for comment. However, Lawk Ghafuri, the Kurdistan Regional Government’s head of foreign media relations, said that “the federal government has to take necessary steps and actions to make sure Turkey will restore the oil exports.”
The delay in negotiations between Turkey and Iraq could potentially impact the global oil supply, which has been tight following significant cuts to OPEC+ output. If the negotiations take longer than expected, it could cause further disruptions in the market.
It is important to note that resolving legal disputes and negotiations between countries can take time. However, with the ongoing concerns over global oil supply, it is crucial that both Turkey and Iraq work towards a swift resolution that will benefit both countries and the global economy.
In conclusion, the negotiations between Turkey and Iraq are crucial in resolving the legal dispute over outstanding payments that Turkey was ordered to pay. The delay could impact the global oil supply, adding to concerns over tight supply in the wake of significant OPEC+ output cuts. Both countries must work towards a swift resolution that will benefit the global economy.
