Iraq can restart critical oil exports cut off by the Middle East conflict, if the central government can reach an agreement with a semi-autonomous region bordering Turkey, analysts and officials have told The National.
A deal between Baghdad and the Kurdistan Regional Government (KRG) to ship crude through the northern Kirkuk fields to the Turkish port of Ceyhan would compensate for losses worth billions, caused by deadly strikes across the country and Iran's blockade of the Strait of Hormuz, they said.
Iranian attacks on oil tankers in Iraq's southern Basra forced authorities to halt operations at all the country’s oil terminals earlier this week, as the deadly war pitting the US and Israel against Iran dragged Iraq into the equation.
Iraq's crude oil production dropped to 1.4 million barrels per day (bpd), Oil Minister Hayan Abdel-Ghani said on Thursday, less than a third of the level before the conflict.
Analysts and officials told The National that Iraq is at risk of a experiencing a severe economic crisis due to its dependence on oil exports, which account for about 90 per cent of the country’s budget and national income.
Baghdad has limited options if disruptions to oil production continue or exports through the Strait of Hormuz remain at a standstill. The alternative route would be through the Iraq-Turkey pipeline, but that comes with constraints.
“The pipeline has largely remained inactive due to legal and political disputes between Baghdad, the Kurdistan Regional Government, and Turkey. Even if fully operational, it would not be able to replace the export volumes normally shipped from Basra,” said a Kurdish official, on condition of anonymity to discuss sensitive political matters.
The Kirkuk–Ceyhan oil pipeline, also known as the Iraq–Turkey crude oil pipeline, runs about 970 kilometres from Iraq’s northern Kirkuk oilfields to Ceyhan on the Mediterranean, and has long been the country’s main northern crude export route.
KRG flows to Ceyhan were restarted in September 2025 after a two-and-a-half year hiatus when a Paris arbitration court ruled in favour of Baghdad, finding the oil exports illegal. Erbil had independently exported crude oil from Kirkuk in 2014 after taking over the area from ISIS.
Baghdad considered this action to be illegal, arguing that its state-owned company, State Oil Marketing Organisation, is the only entity authorised to manage Iraqi crude exports through Turkey.
“Nevertheless, if an agreement is reached between Baghdad and Erbil, the northern route could serve as the most realistic partial alternative to maintain some level of exports,” the Kurdish official said, adding that a deal could be made possible as Iraq is facing many challenges from the regional war.
Iraq’s Oil Ministry sent a letter to the KRG early last week requesting that at least 100,000 barrels per day of crude be pumped from the state-run Kirkuk oilfields and transported to Ceyhan through existing pipeline infrastructure. Kurdish authorities have not yet responded.
Missed opportunities
Iraq has missed many opportunities to expand its oil exports through routes other than Basra, an Iraqi official told The National.
“There isn't another option for Iraq to export oil through Basra, there was a previous initiative to build a pipeline through Aqaba," the official said, referring to a proposal to move crude oil from the southern port to the Jordanian Red Sea city, by-passing the Hormuz.
"However, due to the lack of vision by the government we failed to reach consensus on that. It was a missed opportunity, we have lost that pipeline. It would have been very useful to us during this difficult time."
Lack of funding and security concerns prevented the project from being carried out.
Another option under discussion is transporting the oil through lorries or tankers to Jordan's Aqaba port, according to the official.
This leaves the Kirkuk-Ceyhan pipeline as an alternative but that requires "political will as that option faces many challenges", said the official.
Yesar Al Maleki, Gulf Analyst at the Middle East Economic Survey, told The National proposals to haul crude by road across borders remain preliminary and would require complex co-ordination with authorities in the Kurdistan Region, as well as in Jordan, Syria, and Turkey,
"Ultimately, these measures may restore limited export capacity, but they cannot compensate for the loss of Basra exports. There is no viable infrastructure currently capable of redirecting large volumes of southern crude to other routes," he said.
The proposal to export oil from Kirkuk through the Kurdistan pipeline to the Turkish port of Ceyhan would represent only about 6 per cent of the 3.3 million barrels per day exported from Basra in February, offering only marginal relief, Mr Al Maleki added.
"Crude would have to be transported from Basra to northern Iraq – it is unclear whether Iraq’s limited pipeline network can deliver sufficient volumes from south to north," he said.
"There are also political hurdles. Baghdad would need to reach an agreement with Erbil to use the Kurdistan pipeline, which is currently the only operational segment of the Iraq–Turkey Pipeline inside Iraqi territory."
Iraq in the crossfire
As the country is attempting to steer itself away from the regional war another unexpected conflict has arisen. Daily attacks between Iran-backed Iraqi militias and US have also fuelled volatility across the country.
American interests have been struck from the north to the south and the US has retaliated against the militias to safeguards its troops.
On Saturday morning, the US embassy in Baghdad was struck by a missile, according to security officials, causing smoke to rise. Other reports have said that a missile struck a helipad in the US embassy compound.
It happened hours after several Iran-backed militia fighters were killed in strikes on Iraq's capital.
US military bases in Baghdad and near Erbil airport, as well as American diplomatic facilities, have been attacked since the war started on February 28.
Baghdad caught off guard
The Iraqi government has been caught off guard with this war and Iran is changing its posture, its security doctrine and is going into all-out war, Renad Mansour, director of the Iraqi Initiative at London’s Chatham House, told The National.
"The only way to survive this hit on its oil infrastructure is by exploring different options through the Kurdistan region or through Syria”, Mr Mansour said, but “there are many complications with that, both technical and political”.
Baghdad's central government has no "plan or scenario or contingency for this war and as a consequence it has had significant hits to its infrastructure", he said.
"It is not only the oil tankers that have been hit, but also medicine, food and daily needs will soon be unable to reach Iraqis, and if it does, it will present many challenges," he said.
The country's inability to stop the attacks on its infrastructure will further drag the nation into a political, economic and security crisis. Iraq has yet to form a government after holding elections in November.
