US and Iraq Discuss 'Swift' Resumption of Key Oil Pipeline, Pressuring Oil Prices

The news that the US and Iraq are discussing the “rapid” resumption of a key oil pipeline has added to the already sluggish oil prices.

On the local 25th, a high - level US official had a phone call with the Iraqi Prime Minister. The two sides agreed that Iraq needs to achieve energy independence and quickly reopen the oil pipeline between Iraq and Turkey.

This pipeline connects Iraq with the Turkish Mediterranean port of Ceyhan and is an important channel for Iraq's oil exports. Since it was closed in March 2023 due to a regional cost dispute, the fate of this pipeline has been the focus of the international energy market.

According to information previously revealed by the Iraqi government, it is estimated that about 185,000 barrels of crude oil per day will be transported in the initial stage of the pipeline's restart. Although this amount is not particularly large, it is enough to have an impact in the current oil market with a delicate supply - demand balance.

Notably, the timing of the US - Iraq discussion on resuming the oil pipeline is quite sensitive. Just as a US leader called for lower oil prices, international oil prices fell to their lowest level this year on Tuesday.

Analysts generally believe that the possible restart of this Iraqi pipeline has intensified market concerns about oversupply and has become one of the important factors weighing on oil prices recently.

However, analysts say that although Iraq has stated that exports from the semi - autonomous region of Kurdistan will remain within its OPEC total quota, the outside world is cautious. As the second - largest oil producer in OPEC, Iraq has a poor record in complying with production cuts. So far, Iraq has not clearly stated how it will ensure compliance with production cut quotas while resuming pipeline exports.

Iraq's Oil Minister Hayan Abdul Ghani said this week that the country is in contact with Turkey to discuss technical issues that need to be resolved before resuming pipeline transportation. Since the pipeline was closed due to a payment dispute in March 2023, many officials have claimed that it will restart soon, but none of these claims have been fulfilled.