Ankara's statement was a gambit in a complex game, where the resumption is still complicated by legal issues between Turkey and Iraq relating to the arbitration case that first closed the pipeline, as well as the need for Iraq’s federal government to reach agreements with Turkey, the Kurdistan Regional Government (KRG) and international oil companies (IOCs) based in the Kurdistan Region of Iraq (KRI).
If the pipeline reopens, a small reduction in global oil prices could help reduce Turkey’s current account deficit and inflation.
Restarting KRI oil flows and a revenue-sharing agreement with Baghdad would help stabilise the KRG’s administration.
Continued revenue shortfalls will potentially destabilise the KRG, raising the risk of igniting a broader regional conflict.
