Kurdistan/Iraq Oil Flows Again Toward Ceyhan: Big Hype, Limited Impact
Russia may divert more oil to Asia if Turkey reduces imports due to a deal with Trump. This would offset redirecting Kurdistan’s oil to Europe, nullifying any plans for more oil in the region!
Oil began flowing in the pipeline on Saturday morning. The Iraqi government expects an initial flow of 190 kb/d, with plans to increase it to 130 kb/d. While Iraq, the Kurdistan Regional Government (KRG), and eight international oil companies celebrated the event and the preceding temporary agreement, not all are pleased.
I publicly stated I’d be surprised if oil flows in this pipeline in 2025 due to unmet Turkish political and financial demands. Last July, Turkey canceled all six agreements governing the Iraq-Turkey pipeline, effective July 2026. Ankara seeks a new deal to increase its revenue, reducing funds for Iraq and Kurdistan. Operating companies were unhappy with the central government’s takeover and contract changes. Why is the sudden shift? U.S. Secretary of State Marco Rubio’s involvement, threats of sanctions if Iraq did not comply, and President Trump’s push for Turkey to stop importing Russian oil may have prompted the shift. In fact, the Trump Administration claimed credit for the agreement.
Marco Rubio Statement on The Reopening of the Iraq-Türkiye Pipeline
This Note explains why my prediction failed and the impact of resumed oil flow on OPEC+ and the global oil markets. When explaining why the projection went wrong, it is not a justification for the failure of the prediction. It is lesson to learn form. I focused on Iraq, Kurdistan, Türkiye, and the operating companies, overlooking the Trump administration’s heavy involvement and the threats it made.