UPDATE: Iraq-Turkey arbitration ruling nears, with Kurdistan’s oil independence in the balance

The eight-year-old case, likely to be decided within the coming months, could give Baghdad major leverage in its campaign to end the KRG's oil sector independence and open a door to negotiate water rights with Turkey.
A worker checks the valve gears of pipes linked to oil tanks at Turkey's Mediterranean port of Ceyhan, which is run by state-owned pipeline company Botas. (UMIT BEKTAS/Reuters)

This story has been updated with additional sourcing and confirmation from the Iraqi Oil Ministry.

ANKARA - As Iraq's federal government escalates its campaign against the Kurdistan region's oil sector independence, perhaps its most important legal action is an eight-year-old arbitration case against Turkey that is nearing a decisive ruling with the potential to jeopardize Kurdistan's crude exports of more than 400,000 barrels per day.

Two senior Iraqi officials said they do not expect a final decision or award at a hearing this week at the International Chamber of Commerce's International Court of Arbitration in Paris, but government leaders and industry officials in Baghdad, Erbil, and Ankara all expect the proceedings to conclude later this year and anticipate a ruling in Iraq's favor.

"We expect the final and decisive decision to be issued within the next few months," the Oil Ministry said in a follow up statement, referring to the hearing as the "final arbitration session." Oil Minister Ihsan Ismaael attended in person, the statement said.

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