Iraq and Turkey Sign One-Year Oil Agreement
The pipeline deal to Ceyhan is key to diversifying Iraq's exports after the closure of the Strait of Hormuz. Meanwhile, new geopolitical tensions are pushing oil prices up on global markets.
The pipeline deal to Ceyhan is key to diversifying Iraq's exports after the closure of the Strait of Hormuz. Meanwhile, new geopolitical tensions are pushing oil prices up on global markets.
Iraq and Turkey signed a one-year agreement on Saturday, August 1, 2026, to increase oil exports via the pipeline to the Turkish Mediterranean port of Ceyhan, N1 Serbia reports. Baghdad aims to diversify its export routes and reduce reliance on shipping lanes in the Persian Gulf, which have been threatened since the start of the US-Iran war in February 2026.
Iraqi Oil Minister Basem Mohamed Khuder el-Abadi stated that the agreement will remain in effect for one year, until the two countries finalize a broader framework deal covering cooperation in the oil, electricity, and water sectors. According to AP World News, the minister clarified that the agreement provides for a minimum daily export of 750,000 barrels of Iraqi crude oil through the pipeline stretching from Kirkuk in northern Iraq to Ceyhan.
This pipeline has been largely inactive since 2023, after exports from the semi-autonomous Kurdish region were halted due to legal and commercial disputes. Last year, exports resumed at limited capacity. According to N1 Serbia, current exports stand at around 200,000 barrels per day, while other sources cite around 170,000 barrels per day. The new target of 750,000 barrels per day represents a significant jump, though it is only a fraction of Iraq's total pre-war exports of about 3.5 million barrels per day.
Iraqi Prime Minister Ali al-Zaidi called the deal "an important strategic milestone for ensuring the uninterrupted flow of Iraqi oil exports and strengthening economic cooperation," N1 Serbia reports. Turkish Minister of Energy and Natural Resources Alparslan Bayraktar, as cited by Azernews, said a transitional agreement has been reached to transport 750,000 barrels of oil per day, adding that the Iraq-Turkey pipeline plays a crucial role in the safe and uninterrupted delivery of Iraqi crude to global markets.
The signing of the agreement comes amid escalating geopolitical tensions shaking global energy markets. Azernews reports that US President Donald Trump has warned of a new major military action against Iran. On the same day, an oil tanker was struck by a projectile in the Strait of Hormuz, and Iran allegedly carried out a large-scale drone attack on Kuwait.
Markets reacted immediately. The price of Brent crude rose to around $92.12 per barrel, while WTI reached $84.61. Azerbaijani oil Azeri Light surpassed the $100 per barrel mark. Additional pressure comes from attacks by Yemen's Houthi movement on ships and ports in the Red Sea, threatening alternative routes for oil exports from the region, particularly for Saudi Arabia.
The rise in oil prices is already being felt in Europe and North America through higher prices for gasoline, diesel, electricity, and natural gas. Although Croatia is not directly involved in the conflict, the global rise in energy prices will inevitably impact the domestic economy and the standard of living. Iraq's monthly oil revenues have fallen from $6 billion before the conflict to around $2 billion, illustrating the scale of disruption in the Middle East.
Beyond the current agreement, a more ambitious pipeline project is also being considered that would connect Basra in southern Iraq to Haditha in the west, and from there onward to the Turkish port of Ceyhan and the Syrian port of Banias. The signing of the agreement came just days after Iraqi Prime Minister al-Zaidi visited Ankara for talks on security, trade, and energy.
