Iraq was forced to halt around 450,000 barrels per day (bbl/d) of crude exports from the Kurdistan Region (KRI) on Saturday through an export pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan.

The cessation of operations comes in the wake of a ruling by the International Court of Arbitration in Paris supporting the Government of Iraq's claim that Turkey was violating the provisions of the Iraqi-Turkish pipeline agreement signed in 1973.  The signatories to the agreement do not differentiate between the north and south of Iraq. Whether it is coming from the north or the south, any crude oil received from the pipeline is considered Iraqi petrol. Nonetheless, Iraq claimed, Turkey facilitated oil exports through the Ceyhan port to the benefit of Kurdistan and to the detriment of Iraq.

Officials in Baghdad and Irbil, the seat of the KRI, have long been at odds over sharing of oil revenues. In 2014, the Kurdish region decided to unilaterally export oil through an independent pipeline to Ceyhan.

The central government considers it illegal for Irbil to export oil without going through the Iraqi national oil company, while Kurdish authorities have said the practice is meant to compensate for budget transfers withheld from the Kurdish region by Baghdad.

Bolstered by the court's ruling, SOMO, the national Iraqi oil marketing company, said that it “is the only entity authorized to manage export operations through the Turkish port of Ceyhan.”

Negotiations are presently underway in Baghdad to work out a new arrangement between the Iraqi federal government, the Kurdistan regional government and Turkey.