In order to resume oil exports via the Iraq-Turkey oil pipeline as soon as possible, the United States encouraged the Iraqi government to come to an agreement with the foreign oil corporations that operate in the Kurdistan region of Iraq.

The spokesperson of the US State Department, Tammy Bruce, told reporters during a press briefing on Wednesday that the US administration is urging the Iraqi government to reach an agreement with the international oil companies to resume oil exports through the Iraq-Turkey oil pipeline as soon as possible.

Bruce also urged the Iraqi government to honor the existing contracts with US companies as part of the issue.

“Reopening the Iraq-Turkey oil pipeline ensures Iraqi oil can reach global markets, especially European markets. Iraq benefits from the stability of resilient supply chains, as we all do,” Bruce added.

Due to financial and legal concerns, crude oil shipments through the Iraq-Turkey oil pipeline, which formerly handled around 0.5 percent of the world’s oil supply, have ceased since March 2023.

After the International Chamber of Commerce (ICC) in Paris ruled that Ankara had violated a 1973 treaty by permitting oil exports without the approval of the federal government in Baghdad, oil flows via the Iraq-Turkey oil pipeline were stopped.

The ruling obligated Turkey to pay Baghdad $1.5 billion in compensation for losses caused by the KRG’s illegal oil exports between 2014 and 2018.

Earlier in March, negotiations held to restart Iraqi Kurdistan’s oil flows through the Iraq-Turkey oil pipeline have failed for the second time in a week due to differences between oil firms and the Iraqi Oil Ministry, according to Reuters.

In February, the Iraqi Foreign Minister, Fuad Hussein, revealed that Baghdad is collaborating with the KRG to resolve technical issues and resume crude oil exports to Turkey, which had been suspended for almost two years and cost Iraq around $19 billion in lost revenue.

The legislative structure is in place, but before oil flows can restart, oil firms, the Kurdistan Regional Government (KRG), and the federal government need to resolve technical issues, Hussein told Bloomberg.