Türkiye says Washington case to determine final Iraq pipeline payout

ANKARA

The process of determining the compensation payment in the long-running oil dispute between Türkiye and Iraq is still ongoing, Turkish Energy and Natural Resources Minister Alparslan Bayraktar said on July 14, following recent reports regarding the amount Ankara may ultimately pay to Baghdad.

The Paris Court of Appeal recently upheld a $1.471 billion compensation ruling against Türkiye in an international arbitration case concerning oil shipments through the Iraq-Türkiye pipeline, according to several media reports.

The case was filed over allegations that Türkiye transported Iraqi oil through the pipeline, loaded it at the Adana-Ceyhan terminal and sold it below Iraq’s official pricing without Baghdad’s approval between May 21, 2014 and Sept. 30, 2018.

The arbitration tribunal had ruled on Feb. 13, 2023 that Türkiye should pay Iraq a net compensation of $1.471 billion. Reports recently said that Türkiye’s appeal seeking the annulment of the ruling was rejected by the Paris Court of Appeal.

Speaking to reporters on July 14, Bayraktar said that, following the arbitration ruling, a separate enforcement case in Washington would calculate mutual claims and accrued interest before a final balance is determined.

“We will see who will ultimately be the creditor after those calculations are completed. A final decision has not yet emerged,” Bayraktar said.

Bayraktar’s remarks came after Türkiye and Iraq announced plans to sign a new one-year agreement to keep the crude oil pipeline operating.

During an official visit to Baghdad last week, Bayraktar said the decades-old pipeline agreement, which governs exports through the line, is due to expire on July 27.

The minister added that oil flows from Iraq to Türkiye’s Mediterranean export terminal at Ceyhan would continue under the renewed arrangement.