The deal allows Iraqi crude to continue moving through the 986-kilometer (613-mile) pipeline that connects Kirkuk to Ceyhan on Turkey's Mediterranean coast. The previous agreement had run for more than half a century, a sign of how central the route has been to energy ties between the two neighbors.
The renewed pact is understood to be retroactive to July 27, when the earlier deal expired. Under the interim pact, 750,000 barrels a day of export capacity is "reserved," Iraqi Oil Ministry spokesman Salim Al-Rikabi said in a phone conversation with Bloomberg.
On Saturday, Turkish Energy Minister Alparslan Bayraktar repeated the same throughput figure on X.
Both sides call the deal an interim agreement, and negotiations between Turkey and Iraq are still going on. Pumping has not been halted during the talks.
The arrangement is temporary by design. The two governments have yet to settle the legal and financial issues that caused the pipeline to shut down for 30 months, and the one-year extension is meant to avoid another interruption while talks continue.
The conflict involving Iran has disrupted oil exports through the Strait of Hormuz, giving the Iraq-Turkey route fresh importance for global supply. Oil moving through this pipeline avoids the Strait of Hormuz entirely. With that waterway threatened by the fighting, the extra year of operation helps reassure buyers about delivery security.
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The strait is one of the world's most important oil chokepoints, and any disruption there can quickly affect prices. Because the Kirkuk-Ceyhan line bypasses the Strait of Hormuz, it gives Iraqi crude a pathway to market that avoids that risk. The route has long been a key outlet for northern Iraqi crude, but its use has been repeatedly limited by conflict and legal disputes. Crude oil was at $84.67 a barrel, a 1.29% move for the day.
The 986-kilometer link has provided an export corridor for northern Iraqi oil for decades, but security problems, political disputes, and infrastructure limits have kept flows far below the system's designed capacity. Reviving the route matters not only for Baghdad's revenue but also for global supply options at a moment when Gulf shipping routes face serious risk.
In June, the head of the State Oil Marketing Organization in Iraq reported that the pipeline was moving only about 180,000 barrels per day - far below its 1.5 million-barrel-per-day capacity and a sign of the large gap still to be recovered. The link is one of Iraq's main energy arteries, but its history is marked by interruptions. A 30-month stoppage ended only last September, and shipments were halted briefly again in March. These repeated halts have kept the pipeline operating well below its potential for much of the past decade.
The two nations' legal battle over pipeline operations had earlier stopped shipments. The dispute centered on oil exports from Iraq's semi-autonomous Kurdish region, which Baghdad said had moved through the pipeline without its approval. Turkey rejected the 2023 arbitration ruling that required Ankara to compensate Baghdad $1.5 billion and pushed for a wider agreement with Baghdad.
The interim agreement comes after Turkish investment in production operations in the Kirkuk area. Turkey's national oil company, Turkiye Petrolleri AO, said during the talks that it would acquire a 15% stake in the Kirkuk operator, BP Energy Company of Kirkuk Limited, which is leading efforts to restore local oil and gas output. Neither side revealed the financial details of that transaction.
The extension creates room for the two governments to continue talks without closing the route.
Al-Rikabi also said Iraq is building another line that would run from southern Basra up to Kirkuk and tie into the Ceyhan export system, giving the country more shipping capacity. Finishing that work would allow Iraq to take fuller advantage of the Ceyhan route.
Getting more crude into the pipeline will require safer conditions, a return to full output from fields in Iraqi Kurdistan, and finishing the infrastructure needed to move bigger amounts from the south to the north. If those conditions are met, the line could eventually move far closer to its 1.5 million-barrel-per-day ceiling, giving Iraq a stronger export position and buyers another reliable supply route.
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