April 16, 2025 [Oil Price]- Is the Iraq-Türkiye Cooperation Set to Skyrocket?
Iraq’s struggling oil and gas sectors may be on the verge of a breakthrough as cooperation between Baghdad and Ankara intensifies. According to Turkish media, Türkiye is advancing plans to expand its energy collaboration with Iraq significantly. Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, recently announced that proposals are underway to construct new oil and natural gas pipelines stretching from Basra to the Mediterranean port of Ceyhan.
In tandem, Ankara and Baghdad are exploring increased volumes of natural gas trade and enhanced electricity cooperation. Despite Iraq’s ramping domestic gas production and pushing toward a zero-flaring strategy, the country remains reliant on imported gas—especially in light of potential reductions in Iranian supplies critical for its power sector. Bayraktar revealed that both countries have reached a preliminary agreement involving crude oil and gas pipelines, interim Turkish gas deliveries to Iraq, and a cross-border electricity transmission line.
Meanwhile, the two nations are progressing on the ambitious “Development Road” project—a significant logistics initiative to connect Asia and Europe. This infrastructure corridor will run through Iraq and link directly to Türkiye, with Ankara pledging a $17.9 billion investment. Türkiye’s strategic objective is clear: Strengthen its role as a regional hub by integrating ports, railways, energy, and logistics into one cohesive infrastructure strategy.
The Development Road, stretching from Basra in southern Iraq to Haditha in the north and connecting to Silopi in southeastern Türkiye, offers significant mutual benefits. The route bypasses the politically sensitive Kurdish Regional Government (KRG) areas, ensuring more stable energy transport. From Silopi, resources would be piped to Ceyhan, Türkiye’s central oil and gas export terminal. Türkiye aims to incorporate additional barrels from Basra to increase pipeline capacity. The Basra-Haditha pipeline agreement signed in January 2025 envisions a 2.25 million barrels per day (bpd) capacity, marking a significant step forward in regional energy flows.
Bayraktar also noted that Türkiye’s current gas infrastructure could deliver around 5 billion cubic meters to Iraq. Initially, this supply will focus on meeting Iraq’s power sector demands, but longer-term plans include reversing the flow to bring Iraqi natural gas to Türkiye and beyond. To facilitate this, discussions are underway on building a supplementary gas pipeline from Silopi to Ceyhan.
Energy isn’t the only area of expanding cooperation. Ankara has also announced plans to double electricity exports to Iraq, backed by constructing a new transmission line. This comes at a critical time for Iraq, which has faced mounting energy shortfalls following the lifting of U.S. sanctions that had previously allowed the import of Iranian electricity.
While both countries appear aligned on their strategic goals, several challenges persist. Chief among them is the unresolved dispute over the Iraq–Türkiye Pipeline (ITP), which has halted Iraqi oil exports to Türkiye for over two years due to diplomatic and financial disagreements. The ongoing dispute between Baghdad and the KRG over revenue sharing and control of oil resources adds further complexity. International oil and gas companies operating in the KRG region also withhold cooperation until outstanding fiscal and contractual issues are addressed.
Since March 2023, exports via the ITP have been suspended following a Paris arbitration court ruling in favor of Baghdad. The court found that Türkiye had breached a 1973 agreement by permitting the KRG to export oil independently in 2014. This ruling has intensified calls for a reassessment of Turkish-Kurdish relations. KRG President Nechirvan Barzani recently met with Turkish Defense Minister Ya?ar Güler during the Antalya Diplomacy Forum to discuss PKK-related tensions and regional developments. There are indications that the KRG may support efforts to dismantle PKK bases in Iraq in exchange for broader economic cooperation with Türkiye.
Meanwhile, Iraq is actively working to boost its export infrastructure. The Iraqi Oil Ministry has announced a new subsea oil pipeline deal with Italian offshore contractor Micoperi and Turkish firm Esta. This pipeline, with a capacity of 2.4 million bpd, will support increased exports from Iraq’s southern ports.
However, Iraq faces significant headwinds. Trump-era tariffs, global recession fears, and rising OPEC+ production exert downward pressure on oil prices. These developments come at a precarious time for Iraq’s rentier economy, which relies on hydrocarbons for over 90% of its revenue.
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