Turkey continues to suffer severe economic and geopolitical setbacks as the Kirkuk-Ceyhan oil pipeline—its critical energy corridor with Iraq—remains inactive more than two years after its closure. Once responsible for transporting nearly 500,000 barrels per day of Iraqi crude to global markets, the 1,000-kilometer pipeline has been shut since March 2023 following an arbitration ruling against Ankara. The International Chamber of Commerce (ICC) found that Turkey violated a bilateral agreement by allowing Kurdish oil exports without Baghdad’s consent and ordered Ankara to pay Iraq $1.5 billion in damages.
Despite Turkish claims that the pipeline is fully operational and technically ready, no oil has flowed since the ruling. Critics in Turkey’s parliament allege that corruption and internal political interests are now driving the prolonged suspension. A 2024 Nordic Monitor investigation revealed that the Kurdish oil arrangement generated significant profits for individuals tied to President Recep Tayyip Erdogan, complicating efforts to fully resolve the dispute and reopen the pipeline.
The financial toll is significant. Turkish lawmakers estimate that state-owned BOTAŞ is losing $25 million monthly in maintenance and guaranteed throughput costs—accumulating over $400 million in lost revenue to date. Opposition MP Deniz Yavuzyılmaz raised concerns that the government might be intentionally prolonging the closure to offset the ICC-mandated damages, while also shielding key political and business figures from scrutiny.
At the same time, Iraq is pursuing alternative export options to bypass Turkey altogether. Talks have resumed on reviving the Kirkuk-Baniyas pipeline through Syria, potentially rerouting up to 300,000 barrels per day. If successful, this could further diminish Turkey’s strategic leverage in regional energy logistics, leaving Ankara to grapple with both lost revenue and waning influence.