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Turkey and Iraq seek 12-month oil pipeline extension to avert July 27
The extension is expected to keep crude flowing from Iraq to the Mediterranean export terminal at Ceyhan and reduce the risk of production cuts ahead of Iraq’s expansion plans.
Turkey and Iraq are expected to sign a 12-month extension of the transit agreement governing the Iraq-Turkey crude oil pipeline within days, according to OilPrice, a move aimed at preventing the pact from expiring on July 27.
The agreement would keep crude flowing from Iraq to the Mediterranean export terminal at Ceyhan, a route that has become one of Baghdad’s few workable export options.
OilPrice reports that after the Strait of Hormuz effectively shut down for months, the Ceyhan route shifted from a secondary outlet into an economic lifeline, when most of Iraq’s southern exports were trapped in the Gulf and Baghdad was forced to slash production and fill storage.
The pipeline’s recent history has been volatile, with flows halted for more than two years after an arbitration court ordered Turkey to pay Baghdad $1.5 billion related to unauthorized Kurdish oil exports from 2014 to 2018, OilPrice added.
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