After a long hiatus, Iraq has become a significant part of the positive agenda in Türkiye. Especially following the visit of the new Iraqi Prime Minister, Ali Al-Zaidi, to Ankara, the tone of news regarding Iraq in the Turkish press and public opinion has noticeably shifted. Newspapers, television channels, and social media are discussing how Kirkuk is being governed by a Turkmen governor for the first time in 100 years, how Türkiye receiving a share of Kirkuk oil and the flow of up to 1 million barrels of oil per day from Iraq to Ceyhan will contribute to Türkiye's energy supply security, and how Istanbul will be connected to Basra via the Development Road Project. In fact, this positive wind has been blowing between the two countries since President Recep Tayyip Erdoğan’s visit to Iraq on April 22, 2024, after a 13-year interval, and the designation of the PKK terrorist organization as a banned entity. However, it is still premature to say that this recently generated positive atmosphere has transformed into a lasting and institutionalized partnership. Indeed, the harsh reaction in Türkiye when the Iraqi Minister of Transport was reluctant to sign bilateral agreements during a live broadcast demonstrated how fragile the positive momentum in bilateral relations still is. Therefore, while the positive wind currently blowing between Ankara and Baghdad is strong, it is still hanging by a thread!
Türkiye-Iraq Economic Relations Are Improving!
When examining legislation published in the Official Gazette throughout the history of the Republic, it is seen that only 38.4% of regulations containing the word "Iraq" relate to economy or trade, while the remainder focus largely on security issues. The transformation that Iraq's place in Türkiye's agenda has undergone over time is also clearly reflected in news content. For many years, whenever Iraq was mentioned, security headings such as the PKK, cross-border operations, sectarian conflicts, and ISIS came to the fore, whereas energy, trade, and investment opportunities have increasingly replaced them in recent times. The shift in Iraq's perception in Türkiye from a security-centric axis to an economy and cooperation axis is a significant indicator of the transformation in bilateral relations.
Indeed, the Cabinet Decree issued prior to Ali Al-Zaidi’s visit to Ankara, alongside the agreements signed during and after the visit, constitute steps capable of producing tangible results and serious economic impacts beyond good-faith declarations remaining merely on paper. The implementation on September 1 of a mechanism concerning payments to Turkish contractors working on water projects in Iraq from an account where the proceeds of 30,000 barrels of oil per day will be deposited; plans to apply a similar model to transportation projects, primarily the Development Road; TPAO's acquisition of a 15% stake in BP Energy Company Of Kirkuk Limited, which operates the Kirkuk oilfields; the transportation of up to 750,000 barrels of oil per day via the Kirkuk-Ceyhan Pipeline for a period of one year, alongside the initiation of negotiations for a new pipeline to enable Basra oil to reach Ceyhan as well; and the resumption of electricity exports to Iraq all indicate that Türkiye-Iraq economic relations can be elevated to a new level in a short time.
Behind Iraq's rapprochement with Türkiye lies a series of factors, such as the fact that the Development Road cannot be realized without Türkiye, the search for a more independent policy against Iran, which is struggling with its own problems, and the desire of the Iraqi public, exhausted by conflicts, to integrate further into the international system. When this is coupled with the severe contraction of crude oil exports and the near-paralysis of budget revenues due to the closure of the Strait of Hormuz, Iraq's need for Türkiye, via the Kirkuk-Ceyhan line, one of the most vital alternative routes through which it can deliver its oil to world markets, has increased even further.
Lessons Must Be Learned from the Past!
Similar processes have been experienced before. Following the 1967 and 1973 wars, rising concerns over the security of energy corridors in the region led the Iraqi administration of the period, recognizing that dependence on the Persian Gulf and the Strait of Hormuz created a strategic vulnerability, to seek an alternative export route. As a result of this search, cooperation was initiated with Türkiye, laying the foundations of the Kirkuk-Ceyhan Pipeline. Indeed, the disruption of oil exports from the Persian Gulf during the Iran-Iraq War in the 1980s demonstrated how vital the pipeline was for Iraq. However, with the restoration of security in the Gulf, Kirkuk-Ceyhan was pushed into the background and remained idle for years. This historical experience forms the basis of Türkiye's demand for a more binding and comprehensive framework from Iraq regarding the renewal of the agreement.
Oil-for-goods agreements have also been experienced before. Under the Border Trade Agreement (BTA), which paved the way for the trade of industrial products in exchange for oil with Iraq, facing severe embargoes due to its occupation of Kuwait, practices similar to the mechanisms being established today continued until the US invasion. However, as Iraq's need for Türkiye diminished, Baghdad's economic orientation shifted toward different actors. Indeed, Iraq, which was Türkiye's second-largest export destination in 2011, dropped to seventh place as of the first half of 2026[1]. In contrast, Iran's exports to Iraq surged by 97% between 2019 and 2023, while China's exports increased by 61% between 2021 and 2025[2]. Therefore, the transformation of today's positive atmosphere into a lasting economic partnership depends, from Türkiye's perspective, on avoiding the missed opportunities of the past.
Chronic Problems Must Be Solved to Maintain the Momentum!
At the forefront of the fundamental problems that have persisted for years in Türkiye's exports to its neighbor with which it shares a 384 km land border are the customs practice discrepancies between the Kurdistan Region of Iraq (KRI), which controls the Iraqi side of Habur, currently the only active border gate between the two countries, and the Iraqi Central Government, along with double taxation, long waiting times, and operational difficulties on the Habur-Ibrahim Khalil line. The Central Government of Iraq directs Turkish trucks to the Syria-Iraq border gates on the grounds that it cannot resolve these aforementioned issues with the KRI. In this regard, the manner in which the Memorandum of Understanding Concerning Railway and Highway Transportation via the Faysh Khabur-Ovaköy Border Gate, signed within the scope of Ali Al-Zaidi's visit to Ankara, is implemented on the Iraqi side is of great importance. If a middle ground cannot be found between the Central Government and the KRI at Ovaköy's Iraqi side, Faysh Khabur, there is a possibility that the operation of the mega-project may also be put at risk.
Sufficient progress has not yet been achieved in the fundamental agreements that will establish the institutional infrastructure of our growing economic and commercial relations with Iraq. The fact that Iraq is not a member of the World Trade Organization and has not signed a free trade agreement (FTA) with Türkiye for years creates a serious predictability problem in bilateral trade. The absence of a binding framework regulating mutual trade enables Iraq to change its customs tariffs and trade policy measures without concern for reciprocity, and allows for the prohibition of the importation of a product whose production has begun in the country or the multiplication of customs duties several times over, even if it falls short of meeting domestic demand. Considering that Iraq needs customs duties more in the short term due to falling oil revenues, one might think that favorable conditions do not currently exist for an FTA. However, it may be the exact right time to approach Iraq, which aims to integrate further into global trade through the Development Road, with an agreement proposal containing transition periods and protection mechanisms. We are at a more positive point regarding the Reciprocal Promotion and Protection of Investments (RPPI) and Avoidance of Double Taxation (ADT) agreements; however, although Türkiye has completed the internal approval processes for the ADT Agreement, the Iraqi side has still not even presented a calendar. The RPPI Agreement has also failed to enter into force because internal approval processes could not be completed.
It Is Possible to Transform the Positive Wind into a Lasting Partnership!
A window of opportunity of a strength not seen for a long time has opened in Türkiye-Iraq relations. The emerging cooperation opportunities in the fields of energy, transportation, water, contracting, and trade possess the potential to elevate bilateral relations from a security-centric framework to a strategic partnership based on mutual economic interests. Iraq's need for Türkiye in the Development Road, the renewed importance of Ceyhan in energy exports, and the role of Turkish companies in Iraq's reconstruction further magnify this opportunity.
However, past experiences show that opportunities in relations with Iraq do not spontaneously transform into lasting partnerships. What Türkiye must do today is not keep the prevailing positive political atmosphere limited to time-bound projects, but support it with permanent mechanisms that will remove legal and logistical obstacles before trade and investments. Beyond our diplomatic missions and relevant institutions in Iraq working wholeheartedly on this issue, organizations such as the Turkish Contractors Association, DEIK Türkiye-Iraq Business Council, International Transporters Association, Turkish Exporters Assembly, and regional exporters' associations also need to provide greater support to this process. The steps to be taken, ranging from a free trade agreement to investment and tax agreements, and from Habur and Ovaköy to the operational model of the Development Road, will determine the future of relations with Iraq. The true success for Türkiye will be to transform this wind into a lasting economic partnership based on mutual interdependence! Otherwise, as in the past, when Iraq's need for Türkiye diminishes, the helm may be turned toward other routes.
[1] TÜİK, Foreign Trade Statistics
[2] Trademap "Trade Statistics for International Business Development" Database