The Kurdistan Regional Government (KRG) has nearly finished constructing its own oil pipeline to the Turkish border, hoping to export Kurdish crude and secure a guaranteed revenue source independent of Baghdad. The pipeline is being sanguinely spun by the media, most industry analysts and the KRG as “independent”; it will circumvent Iraqi state authority, further enhance the KRG’s political and energy sector autonomy and enable international oil companies (IOCs) to fully monetize production. Yet, a deeper look at the KRG pipeline questions how independent it really is, or can become. Instead of bypassing Baghdad, the pipeline will be tied into the existing Iraqi state infrastructure. Consequently, official Iraqi Kurdish oil exports will not be made by a KRG fiat, but will result from a larger bargain between Erbil, Baghdad and Ankara, although one that affirms Iraqi sovereignty. 

In some ways, the KRG pipeline is autonomous. It lies within Iraqi Kurdistan's official boundaries and is fully controlled by the KRG. The pipeline will also be linked to an independent metering station distinct from the current Iraqi-controlled station at the Feshkabor (Turkish) border. In this way, the KRG can monitor and control its own exports without intervention from the Iraqi government. At a minimum, the 400,000 barrel per day pipeline will function as an internal feeder line that provides a more cost-effective means to transport Kurdish crude to the Turkish border than current trucking operations.

Still, the pipeline is not independent. Even with its own metering station, the KRG will have to tie its pipeline into the existing Iraqi-Turkish pipeline if it wants to transport Kurdish crude to Turkey’s Mediterranean port in Ceyhan. There is no alternative pipeline infrastructure in Turkey in which this KRG line can be connected. Once Kurdish crude is transmitted through the Iraqi-Turkish pipeline, Baghdad can calculate the KRG portion of exports by deducting the amount shipped from Kirkuk from the total amount received at Ceyhan — ascertained by Iraqi State Official Marketing Organization officials stationed there. The KRG would also have to coordinate the timing of its crude shipments with Iraqi officials in Kirkuk who control the Iraqi-Turkish pipeline, since the heavier grade of Kurdish crude cannot be mixed with the lighter Kirkuk grade. 

Legal issues pose further challenges to independent, official KRG exports. The Pipeline Tariff Agreement renewed between Baghdad and Turkey in 2010 for 25 years (with a 10-year possible extension) affirms that all fluids inside the Iraqi-Turkish pipeline belong to the Iraqi government.  Kurdish crude that enters the pipeline to Ceyhan at any point would be legally considered Iraqi property. Payment then becomes a problem, since there is no legal mechanism that permits Ankara to circumvent Baghdad and pay the KRG directly. In fact, despite the energy ties that bind Ankara and the KRG, Turkish Energy Minister Taner Yildiz has affirmed that under any export scheme Turkey would pay Baghdad directly and let the payment issues be resolved internally.