Iraq is working on rehabilitating its Kirkuk-Ceyhan oil pipeline to pump crude to Turkey's Mediterranean port after halting exports from the south due to the closure of the Strait of Hormuz, Oil Minister Hayan Abdul Ghani said on Monday.
The Iraq-Turkey Pipeline, a major energy artery connecting Iraqi Kurdistan's northern oilfields to Turkey, has been largely idle for more than a decade due to damage from the Islamic State in Iraq and Syria and other armed groups.
Mr Abdul Ghani said the line “is currently undergoing final inspection and qualification, and only about 100km remain to be tested hydrostatically within a week”.
He added that Iraq can pump between 200,000 and 250,000 barrels per day through the route once operational.
The move comes as Iran's widening regional strikes have devastated Iraq's southern export infrastructure. The BP-operated Rumaila field, which had been producing about 1.5 million bpd, was briefly shut due to storage capacity constraints.
Iranian drones have also attacked the Majnoon field and Erbil's Lanaz refinery. Explosive-laden boats struck two tankers off the Port of Basra, setting them on fire. This forced Baghdad to halt all loadings at its southern terminals.
With no vessels coming to load, Iraq has taken fields offline due to storage constraints.
Crude output has since fallen to 1.4 million barrels per day, less than a third of the 4.3 million bpd produced before the conflict. Exports, which averaged 3.4 million bpd prewar, the bulk of them sent through Basra, have been brought to a near halt.
The Strait of Hormuz, through which 20 per cent of global crude passes, has been effectively shut to all traffic since the war broke out on February 28.
Iraq is also exploring overland routes, looking to transport between 100,000 and 200,000 bpd to international markets through Turkey, Syria and Jordan.
However, discussions with the Kurdistan Regional Government to use its own pipeline network through to Ceyhan have hit a deadlock over a financial dispute between Baghdad and Erbil.
The KRG has said it will not agree to pump oil until Baghdad lifts a ban on dollar transfers to the region imposed in January. Erbil says the move has strangled trade by preventing Kurdish businesses from accessing hard currency for imports.
Oil revenue accounts for nearly 90 per cent of Iraq's total income, resolving the standoff critical for both sides.
Jennifer Gnana contributed to this report
