Against the backdrop of rising right-wing colonialist politics, the legitimacy crisis of capitalism, the collapse of human rights principles, and the climate crisis, the story of one of West Asia's most critical pipelines, the Kerkük-Ceyhan pipeline, has grown increasingly complex. The international pipeline agreement between Turkey and Iraq was due to expire on 27 July 2026, after Turkey announced in 2025 that it would not renew the current terms. However, given how profitable and strategically important the pipeline is for all parties, its closure is unlikely. The real question is what the new terms will be and who will bear the cost.
The pipeline could not escape the region's harsh political conditions, including the rise of ISIS, anti-Kurdish politics, the uncertainties of Iraq's domestic politics, and the current rivalry between Iran, Israel, and Turkey. The pipeline gained renewed strategic importance following the US and Israeli attacks on Iran in February 2026 and the subsequent severe disruption of shipping through the Strait of Hormuz, which exposed Iraq's dependence on its southern oil-export routes.
Today, this issue is at the center of a serious impasse involving Turkey, Kurdistan, and Iraq, but also many other stakeholders. For some, it may be the primary opportunity in the energy market.
The History of the Kirkuk-Ceyhan Pipeline
The Kirkuk-Ceyhan pipeline, also known as the Iraq-Turkey Pipeline (ITP), is one of the region's most important energy lines. Established under the 1973 Turkey-Iraq Crude Oil Pipeline Agreement, the 986 km pipeline carries oil from Iraq's northern oil basins to Ceyhan (Yumurtalık) on Turkey's Mediterranean coast and has a capacity of approximately 1.5 million barrels per day (bpd). The pipeline's primary function is to transport Iraqi oil via Turkey through Mediterranean maritime routes, reducing Baghdad's dependence on transit through Syria. This makes it one of Iraq's only two main export outlets, alongside its southern Gulf terminals.
However, even this has not created entirely safe and stable conditions in such a volatile region, where every instability affects it directly. The pipeline has suffered repeated damage and interruptions, from Gulf War sanctions and America's occupation of Iraq in the 2000s to ISIS attacks. Furthermore, the pipeline passes close to another political crisis: the Kurdish issue.
Kurdistan's Independent Oil Exports and the Baghdad-Erbil Dispute
The Kirkuk-Ceyhan pipeline sits at the center of another political conflict shaped by oil's financial value. Even though Baghdad dictates otherwise, a third party has been involved in the pipeline since 2014. The Kurdistan Regional Government (KRG) developed an independent pipeline connection to Turkey in 2013 and began commercial exports in May 2014, bypassing Baghdad's control over oil sales. The dispute over this infrastructure preceded ISIS's major territorial expansion in June 2014 and reflected a broader struggle over control of oil exports and revenues. This gave the Kurdistan government responsibility for, and profit from, the oil.
While long-standing political tension between Iraq and Kurdistan is rooted in successive Iraqi governments' centralist, Pan-Arab policies toward the Kurds, as well as competition over oil revenue, this alternative line has caused major economic, legal, and political conflicts.
Baghdad responded to the KRG's independent oil exports by suspending federal budget transfers in 2014, including the Kurdistan Region's previously agreed 17% budget allocation. This allocation was established through federal budget arrangements rather than explicitly guaranteed by the Iraqi Constitution.
Emboldened by the pipeline's economic power, the Kurdish government held an independence referendum in September 2017. In this referendum, 72% of eligible voters participated, and 92.73% voted yes for independence.
Following the September 2017 independence referendum, Iraqi federal forces, supported by Popular Mobilization Forces (PMF) units, retook Kirkuk and other disputed territories that had been under Kurdish control. The loss of these oil-rich areas substantially weakened the KRG's economic and political position and led the KRG to freeze the referendum result.
The KRG's independent exports had already strained Iraq–Turkey relations. Baghdad viewed Ankara's cooperation with the bypass as a violation of its sovereignty and, in 2014, filed an arbitration case against Turkey at the International Chamber of Commerce. In March 2023, the tribunal awarded Iraq approximately $1.5 billion in damages, prompting Turkey to suspend oil flows through the pipeline. The prolonged shutdown subsequently generated substantial economic losses for the parties involved. Although the ruling created renewed tension, shared opposition to Kurdish independence and to the PKK has drawn Iraq and Turkey closer together since 2017. Kurdistan–Turkey relations, which had flourished until the referendum, suffered a sharp but temporary rupture, and Ankara has since dealt with Erbil from a position of greater strength. Turkey gained fuller dominance over the pipeline, watched the KRG lose Kirkuk and other disputed oil-rich areas to Baghdad, and gained ground against the PKK through closer ties with Baghdad and continued security cooperation with Erbil. Flows only resumed on 27 September 2025, under an interim deal between Baghdad, the KRG and international oil companies that placed Kurdish exports under the control of Iraq's State Organization for Marketing of Oil (SOMO).
How the Strait of Hormuz Blockade Reshaped Iraq's Oil Exports
Months before the contract was due to end, a new development made the use of Iraq's oil pipelines far more critical. Much of West Asia, including the Kerkük-Ceyhan pipeline, was affected by the US and Israel's attack on Iran in February 2026, which included Iran's blockade of the Strait of Hormuz. Before the war, Iraq exported more than 3 million barrels of crude oil per day, with the vast majority shipped from its southern Gulf terminals through the Strait of Hormuz. This dependence left the country highly vulnerable to disruptions in maritime transport. As oil revenues make up more than 85% of the country's budget, the blockade imposed a major fiscal emergency for Iraq. While Baghdad is trying to reduce its dependence on the Strait of Hormuz, troubles around its only other main export route, the Kirkuk-Ceyhan pipeline, show how little room it has to maneuver. Today, this limited maneuverability is driving Iraq into a complex, multi-layered process involving its neighbors and foreign powers.
Iraq, Turkey, and Kurdistan: Competing Interests in the New Pipeline Deal
The competing interests over the future of Iraqi oil have two dimensions. The first dimension is what the direct parties, Turkey, Iraq, and Kurdistan, want today. Negotiations have shifted from a bitter legal standoff to an intense race for long-term strategic leverage, especially following the closure of the Strait of Hormuz. Turkey seeks to expand its regional influence and power, while Iraq aims to secure alternative routes for its oil exports to sustain the state budget. Meanwhile, Kurdistan is navigating the issue amid severe uncertainty. It is caught between Iran's attacks on the region, the US-Israel plan, Turkey's regional politics regarding the Kurds, Iraq's moves against Kurdish gains, and its own internal political conflicts.
On 1 August 2026, Iraq and Turkey signed a one-year agreement to maintain oil transportation through the pipeline while negotiations over a more comprehensive, long-term energy agreement continue. Through this interim deal, Iraq aims to safeguard its treasury by rerouting oil to the Mediterranean and has secured transportation of up to 750,000 barrels per day (bpd). The temporary agreement allows Turkey to maintain its position as a major transit route for Iraqi oil. However, the dispute over the approximately $1.5 billion arbitration award remains unresolved, with separate legal proceedings concerning its enforcement.
In the longer negotiation, Turkey presses for two things. First, it wants to guarantee long-term capacity for Iraqi oil. Second, more ambitiously, it wants to anchor a "development road" project linking the Gulf and Europe through Iraq and Turkey, including a single package of transit, field development, oil refining, power generation, and the Ceyhan terminal. However, Iraq is not yet convinced by this offer as it navigates a complex diplomatic game amid West Asia's current "reshuffling."
This is where the second dimension of the issue comes into play: foreign intervention. In July 2026, Washington moved from backing an alternative to brokering one. On 17 July, during Prime Minister Ali al-Zaidi's visit to Washington, Iraq and Syria signed an agreement to rebuild the Kirkuk-Banyas pipeline, which has been defunct since 2003. The State Department said a US-led consortium would handle the project's technical and financial side, with an initial capacity of 2 million bpd. Such a route would reduce Iraq's reliance on both Hormuz and Turkey, and would likely give Washington and its regional allies, Israel included, far more leverage over Iraqi exports than they currently have through Ceyhan.
Iraq is not positioned as a genuine power broker when competing foreign interests are at play. The current and rising dependence on foreign actors may bring short-term gains because the anti-Iran redesign of the region and Israel's alliances against Turkey lend it some value. As an example, Iraq may well use this moment to push Kurdistan into an even weaker position, since the anti-Kurdish sentiment in Damascus and Baghdad seems to resurface. However, it is doubtful who this dependence on the U.S. and Israel benefits, and for how long. Other global examples show that this type of policy benefits only the country’s elite. Egypt and the Gulf monarchies clearly illustrate this pattern. While the alliance with Washington safeguards the regime’s security and the elite’s wealth, it has left broader political participation and economic diversification behind. In both cases, external support compensates for a lack of domestic legitimacy. This allows ruling elites to keep the gains from external patronage in their own hands, rather than redistributing them or reforming the political system that produces the dependency. Moreover, as the current war with Iran has shown, US-dependent Gulf states find themselves exposed, bearing the costs of a war they did not choose. At the same time, domestically, they are plagued by human rights violations and severe income inequality. In other words, the key question for Iraq will be what kind of future it envisions for its economic sovereignty.
Still, in the long run, the centre of gravity for Iraq's northern exports may shift toward Banyas rather than Ceyhan, though a rebuilt Syrian line is years away from operation. What remains open is how Europe's own energy dependencies evolve, and how Turkey navigates a process with this many moving parts. The high-level talks between Iraq and Turkey on 28 July 2026 reflected their continued interest in expanding bilateral energy and transport cooperation. However, Iraq had already formally committed to the Development Road project through a memorandum of understanding signed with Turkey, Qatar, and the United Arab Emirates in April 2024. On the other hand, the fact that the road bypasses the Kurdistan region highlights the contradictory stance Iraq has taken, particularly in its relations with its Kurdish citizens. Similarly, the fact that the route does not align with the foreign policies of interventionist countries such as Iran and Israel will create uncertainty regarding its long-term feasibility.
The Human Cost of Iraq and Kurdistan's Oil Dependency
When the issue is such a multifaceted matter of political economy and international relations, certain preconceptions must be challenged. We should not forget that, even within this international political economy debate, the ordinary people directly affected by the pipeline's fate are the ones at risk. While focusing on how oil will be transferred, how pipelines will operate, or how international politics will take shape, it is always economically vulnerable communities whose lives are disrupted. Over the past few years, it has become clear that even the slightest fluctuation in the oil economy of both Iraq and Kurdistan has made life difficult for middle- and lower-class citizens, leading to unpaid wages and a decline in purchasing power.
It is unclear where the pipeline will run tomorrow, but the fact remains that these governments must not make their people’s basic livelihoods dependent on oil. Although such oil-dependent economies may yield large profits in the short term, it is certainly not sustainable. Even more, centralizing massive amounts of money leads to corruption, authoritarian regimes, and significant income inequality in almost all oil-dependent economies. In other words, the “oil curse” creates a vicious cycle in which the oil-dependent economy creates its own oil elite, and the elite’s resistance prevents ordinary people from developing alternatives. Therefore, the way out of this cycle might be to implement comprehensive reforms, such as industrial revival and agricultural modernization, to distribute centralized monetary flow to the broader population gradually.
Moreover, again and again, it is the people of Iraq and Kurdistan who are the stakeholders in this oil; neither the US nor Israel has a legitimate say. Therefore, discussing these foreign actors should not normalize their interventions or Iraq’s and Kurdistan’s dependency on the US political agenda. No matter where in the world one lives, understanding the true fate of the Kerkük-Ceyhan pipeline depends on demanding a dignified life for the peoples of West Asia, not on states' foreign policies.