Can oil and water mix?: Creating opportunities for Iraq-Turkey cooperation

The foreign ministers of Iraq and Turkey speaking at a joint press conference in Baghdad, August 22, 2023 (Image by Iraqi’s Foreign Affairs Ministry)

Originally published by the Middle East Institute — August 31, 2023

Last week saw a flurry of diplomatic activity between Baghdad and Ankara. The top priorities in the talks that took place in Erbil, Ankara, and Baghdad almost simultaneously were oil exports, the presence of the Kurdistan Workers’ Party (PKK) in Iraq, and Iraq’s water crisis.

The visits by Ankara’s foreign and energy ministers to Iraq and by Baghdad’s oil minister to Turkey were preparations for an anticipated visit by Turkish President Recep Tayyip Erdoğan to Iraq, which Iraqi sources think could happen in September, to agree on a way forward on these thorny issues. The outcomes have been unimpressive, with public statements offering no new ideas and little more than reiterations of long-established positions, demands, and expressions of hope. But there is an opportunity for Iraq to shake things up and improve its bargaining position, at least on the oil export issue, possibly more.

What’s at stake for Iraq and Turkey?

First, Baghdad and Erbil seek the resumption of oil exports from Kirkuk and the Kurdistan region through the Iraq-Turkey Pipeline (ITP). These have been halted since March, when Iraq won an arbitration case at the International Chamber of Commerce (ICC) against Turkey for allowing unilateral exports from the Kurdistan region without Baghdad’s approval. The loss of 450,000 barrels per day (bpd) of exports for five months has cost Baghdad and Erbil some $5 billion in unrealized gross revenue. The monetization of this oil is necessary to implementing Iraq’s $150 billion 2023 budget and keeping the daunting $48 billion deficit in check. Turkey’s direct losses are smaller, to the tune of $2 million-3 million a day in oil transit fees, setting aside the lost opportunity of a revitalized oil and gas trade with Iraq.

Second for Iraq is water. The country is experiencing yet another dry year that has seen lakes and marshes disappear as the volume of water flowing down the Tigris and Euphrates from upstream neighbors Turkey and Iran dwindled, forcing Iraq to take desperate measures, such as installing new pumps to extract water from dead space in reservoirs along both rivers. The situation is particularly dire with tributaries originating in Iran, like the Little Zab, whose water has been blocked by Iran for weeks, and with the Euphrates, which Iraqi water officials say currently runs dry before it can meet the Tigris at their iconic confluence near Basra. In July, the Food and Agriculture Organization (FAO) in Iraq reported the Euphrates measured a mere 56 cm deep in Nasiriyah, causing 90% of the nearby marshes to go dry.

The third issue is security, particularly the presence of the PKK on Iraqi territory stretching from Sulaymaniyah and Makhmour to the east, to the rugged Qandil Mountains in the north, and all the way to Sinjar near the Syrian border in the west. Turkey has conducted numerous airstrikes to weaken the PKK inside Iraq and insists that either Baghdad or Erbil must take action to end the PKK “virus” that’s spreading, in Ankara’s view, along hundreds of miles of its southern border. Iraq has its own problems with the PKK, whose presence, and that of its affiliates, has attracted heavy-handed Turkish military action and destabilizes the war-ravaged Sinjar in western Nineveh Province.

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