Baghdad Blocks Turkey’s Sale of Northern Iraqi Oil
An unwise diplomatic move from the Turkish government has led to the risk of losing thousands of barrels of oil.
The government of Turkey has left the country in a diplomatic mire after attempting to bypass the central Iraqi government to secure an oil deal exclusively with the northern Iraq regional government. The Baghdad administration’s reaction to this was predictably strong; it took action to stop the project from advancing, citing international agreements. Turkey is now forced to store the oil flowing in the pipeline, which they cannot sell due to the situation, in storage tanks at the Ceyhan terminal. The depot in Ceyhan is now reportedly reaching the limit of its capacity, but sales of the oil are still not possible.
The situation arose in late 2013, when Turkey’s ruling AK Party signed an agreement with the Barzani regime of Iraq’s autonomous northern region without including the central government. The central government in Baghdad was furious about this development, warning Turkey that this action was both a violation of international law and of the agreements between the two countries. Thus, this deal would prevent Turkey from selling oil, even if purchases from northern Iraq began. Despite this warning, the oil began to be pumped, and Turkey now finds itself receiving oil that it is unable to sell and struggling to continue storing. As for the Northern Iraq Autonomous Regional Government, the central government exerted even greater pressure on it, refusing to pay their wages as a result of the deal.
The flow of oil into Turkey is increasing by the day, and the storage facilities in Ceyhan are approaching their limit of 2.5 million barrels. The ongoing problems regarding this potentially lucrative source of trade must by all accounts be regarded as a serious misjudgement on the part of the Turkish government, which thought it would be a fait accompli to strike a favourable deal with the Barzani government without the consent of Baghdad.