Iraq's northern oil exports were shut down Saturday after an international court of arbitration ruled that Turkey has violated a bilateral treaty by facilitating independent pipeline flows from the Kurdistan Regional Government (KRG).
The long-expected ruling deals a potentially fatal blow to the KRG's quest for autonomous control of its oil sector and raises urgent questions about how oil companies in Kurdistan will be able to continue producing and selling the roughly 400,000 barrels per day (bpd) of crude they had been pumping to Turkey. The pipeline shutdown also closes off federal Iraqi exports through the KRG-controlled pipeline that had been averaging about 75,000 bpd in the past year.
"The Oil Ministry welcomes the final ruling in Iraq’s favor," the Oil Ministry said in a statement Saturday, adding that it would "explore mechanisms to export Iraqi crude via the Turkish port of Ceyhan with the relevant authorities in the Kurdistan region and with the Turkish authorities."
For now, however, Turkey has taken those exports offline.