In a significant development, the Iraq-Turkey pipeline, which had been rendered unusable due to a court ruling earlier this year, is now set to resume operations, according to an announcement by Turkey's Energy and Natural Resources Minister, Alparslan Bayraktar, on Monday.

Bayraktar declared that the pipeline, which exports Kurdish crude oil through the Turkish port of Ceyhan, is ready for immediate operation and is expected to be operational within the current week, as reported by Turkey's state-owned Anadolu Agency.

This marks a major breakthrough in the ongoing talks surrounding oil exports from the Kurdistan Region, which had been halted since March 23 following a Paris-based arbitration court ruling that favored Baghdad over Ankara. The court concluded that Turkey had breached a 1973 agreement by allowing the Kurdistan Regional Government (KRG) to commence independent oil exports in 2014.

The suspension in oil exports has had substantial financial implications, with a senior Kurdish official estimating losses of approximately $6 billion for both the Kurdish and Iraqi governments since March.

Prior to the halt, the pipeline facilitated the daily export of around 400,000 barrels of oil from Erbil to the Turkish port of Ceyhan. Additionally, it transported some 75,000 barrels from the Kirkuk oil fields, which are controlled by the Iraqi government.

In late August, Minister Bayraktar held discussions with Iraqi Oil Minister Hayyan Abdul Ghani regarding the resumption of crude oil exports through the pipeline.

In July, Turkish President Recep Tayyip Erdogan stated in a press conference that the suspension of oil exports from the Kurdistan Region was a result of issues between the federal government and the KRG, emphasizing that Turkey had no objections to receiving the oil. In response, Iraq's oil ministry affirmed that Erbil and Baghdad were in agreement concerning the resumption of exports.

Under Article 13 of the Iraqi federal budget for 2023, Erbil is obligated to deliver a minimum of 400,000 barrels of crude oil daily to Iraq's State Oil Marketing Organization (SOMO) for export through Turkey's Ceyhan port or for domestic use, should export not be possible.

The resumption of oil exports through the Iraq-Turkey pipeline is anticipated to have a significant impact on the economies of both the Kurdistan Region and Iraq and marks a step forward in resolving long-standing disputes over oil production and exportation.