Talks aimed at restarting the crucial oil pipeline from northern Iraq to Turkey’s Mediterranean coast collapsed Thursday, marking the second failed negotiation in less than a week, according to sources close to the discussions.
The pipeline, which once carried Kurdish oil exports to global markets through Turkey’s Ceyhan port, has remained dormant for two years amid disputes between Baghdad and Ankara. I’m not sure why it’s been so hard for Iraq to keep its oil business free of complex geopolitical tensions lately. Major development: an American diplomat from the U.S. Embassy in Baghdad has entered the fray for the first time. The rare measure reflects Washington’s growing alarm about the months long export freeze, which could affect the region’s energy security and economic stability.
The major impediment to an agreement, major players in the talks say, is oil pricing mechanisms. The blistering threats have left Iraq and Turkey at an impasse with international pressure, neither ready to bend in their respective financial demands.
According to reports, the Trump administration would take a hard line on the matter and even threaten Iraq with sanctions for not meeting the conflict with a resolution. This belligerent posture in turn, however, comports with a wider American strategy of financially strangling Iran by leveraging alternative energy supplies inside the Middle East.
“Washington enjoys Iraqi oil as a factor of balance against Iranian influence in energy markets,” said an Iraqi ministry official who spoke on the condition of anonymity because of the sensitivity of the discussions. The Iraqi government should not accept bad terms to value their national wealth.
The shutdown of this pipeline caused major financial challenges to the Kurdish Regional Government since their oil revenue remains critical for their operation. Public sector workers and essential service operations across northern Iraq faced financial challenges when export of oil products to the market stopped for two years.
The restart of operations remains pending until technical and legal requirements are solved according to Turkish federal authorities. Iraq maintains its desire to exercise direct control of export activities together with preferable revenue sharing terms.
Energy analysts have identified political tensions running deeper than business interests as the main reason behind this stall. “This isn’t just about oil pricing,” explained regional expert Fatima al-Hamid. “It’s about sovereignty, regional influence, and competing visions for Iraq’s economic future.”
Sunday’s earlier failed talks had raised modest hopes for progress after both sides agreed to continue discussions. But Thursday’s impasse, despite international mediation efforts, suggests a solution is still far from hand.
For ordinary Iraqis, especially those in the autonomous Kurdish region, the stalemate has translated into economic hardship and uncertainty. Businesses around the area that depend on oil have suffered heavy losses, and several oil service companies have either shut down or scaled back operations dramatically.
Amid pressure from Washington, both Baghdad and Ankara will need to decide whether to keep their hands on the brakes — or let go. The presence of American diplomats indicates that what started as a bilateral dispute has transformed into one of regional strategic significance.
No additional talks have been set up, but sources say behind-the-scenes diplomacy efforts continue. Maintaining this high-stakes energy corridor again–a constant element of this complex treaty process–remains the second seat, which the international community will not miss, therefore peering into this complex path and to determine what might be its wider consequences on regional stabilization & global oil markets.
