Iraq signs major pipeline deal with Turkiye, Italy to boost oil exports
The new deal comes as Washington has been pressuring the Iraqi government to reduce its energy dependence on Iran
Iraq’s Oil Ministry announced on 13 April that it signed a deal with an Italian-Turkish consortium for the construction of a subsea oil pipeline.
The agreement was signed with Italian offshore contractor Micoperi and Turkiye's Esta, according to the ministry.
The pipeline will allow for the export of around 2.4 million barrels of oil per day (bpd) through southern Iraqi ports. The move is part of Iraq’s broader strategy to raise its oil production capacity to over six million bpd by 2029.
Iraqi Oil Ministry undersecretary Bassem Mohamed Khodeir recently noted that this goal will be achieved through intensified exploration and drilling, including a redevelopment deal with UK oil giant BP for four major oil and gas fields in Kirkuk.
According to Iraq's Deputy Prime Minister for Energy Affairs and Oil Minister Hayan Abdul Ghani, the project is a “strategic priority” for the country’s energy sector that would “improve the sustainability of export operations and provide greater reliability by establishing multiple export points.”
Iraq has 145 billion barrels worth of proven oil reserves, among the largest in the world. Iraqi Prime Minister Mohammed Shia al-Sudani has repeatedly called for the diversification of Baghdad's energy sources.
The new deal comes as Washington has been pressuring Baghdad to reduce its energy dependence on the Islamic Republic of Iran, which for years has been a leading supplier of fuel and electricity to Iraq.
A US State Department spokesman announced last month that President Donald Trump had revoked a US sanctions waiver allowing the Iraqi government to import electricity from Iran.
The spokesperson said the cancellation of the waiver “ensures we do not allow Iran any degree of economic or financial relief” and that the US government is aiming “to end [Iran’s] nuclear threat, curtail its ballistic missile program, and stop it from supporting terrorist groups.”
“We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible. Iran is an unreliable energy supplier. Iraq’s energy transition provides opportunities for US companies, which are world-leading experts in increasing the productivity of power plants, improving electricity grids, and developing electricity interconnections with reliable partners,” the spokesperson added.
Iran’s Oil Minister Mohsen Paknejad arrived in Baghdad on Monday for talks to strengthen energy cooperation.
The US has also pressed Baghdad to resume Kurdish oil exports to Turkiye, which were halted two years ago after an international court in Paris ruled that they violated an oil pipeline agreement between the Iraqi and Turkish governments dating back to the 1970s.
Iraq's oil minister made a surprise announcement in February saying exports from Iraqi Kurdistan would soon resume.
Media reports at the time said that mounting pressure from the White House was a key driver behind the announcement.