On Thursday, March 23, the International Court of Arbitration ruled that the “Iraqi national oil company SOMO is the only entity authorized to manage oil export operations through the Turkish port of Ceyhan”, Middle East Policy Council reports. Iraq filed a lawsuit against Turkey nine years ago over an oil agreement between Erbil, the capital of Iraqi Kurdistan, and Turkey, alleging that the Iraqi government's approval was necessary for energy exports.
The 2014 lawsuit centered on who controlled and had a claim to the oil exports and revenues of the semi-autonomous Kurdistan region. Written in Ahram Online, “Baghdad said the arbitration tribunal of the Paris-based International Chamber of Commerce had accepted Baghdad's claims in a dispute with Ankara over who had responsibility for exporting the autonomous region's oil... But in defiance of Baghdad, the regional government in Arbil continued to export oil through Turkey at a rate of around 450,000 barrels a day.”
As discussions over the legitimacy and ownership of oil supplies continued, Turkey on Saturday stopped the flow of Iraqi crude oil through Ceyhan in response to the court's ruling. The Iraqi government is still in talks to discuss the next steps in regards to oil passing through Turkey. In addition, Kurdish political leadership is optimistic about future relations with Iraq.
However, arbitration between the three parties is not over. While the court ruled in favor of Iraq, this process is expected to continue, potentially changing relations between the respective groups. Shown in Gulf Daily News, “the ruling, in which Turkey has been ordered to pay Iraq around $1.5 billion before interest, covers the 2014-2018 period, according to a source. A second arbitration case, which the source expects to take around two years, will cover the period from 2018 onwards.”
