Turkey is accelerating its economic and energy expansion into Iraq, capitalising on Iran’s weakened regional position and the disruption of oil exports through the Strait of Hormuz.
According to an August 9 report by Al-Monitor, Ankara and Baghdad are moving beyond their traditional relationship based on oil transit, developing broader cooperation in energy production, infrastructure and regional connectivity. Turkey has acquired a direct stake in major Kirkuk oil fields, reserved additional pipeline capacity for Iraqi crude and renewed its push for the Development Road linking the Gulf with Europe.
The agreements were announced following Iraqi Prime Minister Ali al-Zaidi’s first official visit to Ankara. Turkish Energy Minister Alparslan Bayraktar said the objective was to take bilateral relations “to a new level,” with energy and infrastructure forming the partnership’s core.
In one of the most significant developments, Turkey’s state-owned TPAO acquired a 15% stake in BP Energy Company of Kirkuk Limited. It will join BP and ConocoPhillips in redeveloping northern Iraqi fields whose resources are estimated at more than three billion barrels of oil equivalent.
Turkey and Iraq also concluded a one-year interim agreement reserving capacity for 750,000 barrels of Iraqi crude per day through the Iraq-Turkey Pipeline. Current flows remain at approximately 170,000–200,000 barrels per day, far below the system’s estimated 1.5 million-barrel capacity.
An energy industry source told Al-Monitor that Ankara’s calculation was straightforward: increasing Iraqi exports through the Mediterranean port of Ceyhan would generate additional transit revenue while supporting regional stability.
The growing cooperation also reflects a changing political balance. Iraq expert Bilgay Duman told Al-Monitor that Turkey was “filling in a vacuum” created by Iran’s weakening position following the war. Tehran has traditionally exercised considerable political, economic and security influence in Iraq through Shiite factions and armed groups. Its declining leverage, combined with US pressure on Baghdad to disarm Iran-aligned militias, has encouraged Iraq to diversify its regional partnerships.
Central to Ankara’s strategy is the Development Road, a planned road-and-rail corridor connecting Iraq’s Grand Faw Port with Turkey and European markets. Turkey, Iraq, Qatar and the United Arab Emirates signed a memorandum supporting the project in 2024.
The Hormuz crisis has increased its strategic importance. Ankara now views the route not merely as a commercial transport project but as the foundation of an integrated logistics and energy corridor connecting Iraqi oil—and potentially natural gas—with Turkish Mediterranean terminals.
For Baghdad, closer cooperation with Turkey offers investment and alternatives to vulnerable Gulf export routes. Iraq remains overwhelmingly dependent on oil revenues and is confronting salary delays, stalled public projects and persistent youth unemployment.
Ahmed Tabaqchali of the Asia Frontier Capital Iraq Fund told Al-Monitor that the crisis presented both countries with an opportunity to resolve longstanding disputes over pipeline access and oil-export control. With Hormuz severely constrained, Ceyhan has become more valuable—and Turkey is positioning itself as Iraq’s principal northern gateway to world markets.