The KRG has lost over $1.5 billion in revenue due to the stoppage of oil flow through the Turkish Pipeline at the Ceyhan Port. The KRG could default on certain debts if a conclusion is not reached soon. This article explains why and how this happened.
Turkey brought Iraq’s Oil Exports of 450,000 barrels per day to a halt through the Iraq-Turkey pipeline on the 25th of March due to a ruling by the International Chamber of Commerce.
Baghdad is still awaiting Turkey's final decision concerning the resumption of northern oil shipments from Kurdistan to the Turkish port of Ceyhan, Iraq’s oil minister Hayan Abdel-Ghani stated this Tuesday. Ankara has informed Iraq that a technical squad would evaluate if the pipeline had been damaged due to the earthquake in February. “We are on the point of sending a group of experts to assess the pipeline to make sure that it has no further issues or requires more thorough tests”, Abdel-Ghani added.
Baghdad requested that Turkey resume flows and loading operations at Ceyhan this month to help offset a revenue shortfall in the Kurdistan region after production fell as a result of Turkey’s shutdown. The 60-day stoppage, which Reuters estimates has cost the KRG more than $1.5 billion and could lead it to default on some debts, comes as the KRG struggles with increasing financial pressure from falling oil prices and high support costs for refugees fleeing conflict in Syria and Iraq.
Turkish elections were held on May 14, but neither of the two main candidates exceeded 50% of the votes required to avoid a second round on May 28. Ankara is currently negotiating with all parties involved to find an amicable solution to the issue.