Geopolitical Briefing: Iraq

— 21 September 2025

• Baghdad and Erbil are close to a deal to restart KRG crude exports via the Turkey (Ceyhan) pipeline, unlocking ~230 kb/d under a SOMO-managed framework. (Reuters)
  
• Iraq opened its first industrial-scale solar plant in the Karbala desert (eventual 300 MW), the first of several large projects aimed at easing the power gap. (AP News)
  
• Washington blocked Baghdad’s plan to import Turkmen gas via Iran, hardening constraints on Iraq’s summer power balance and sanctions exposure. (Reuters)
  
• The Oil Ministry signed a joint-operations pact with TotalEnergies, QatarEnergy LNG and Basra Oil—advancing the GGIP gas-capture, Artawi expansion and seawater schemes. (Reuters)
  
• Baghdad hosted the fifth technical meeting for the Development Road with Turkey, Qatar and the UAE, while Oman signalled interest in joining the corridor. (Iraqi News)
  

Iraq, the KRG, and international oil firms appear to be converging on a restart formula for the Iraq–Turkey pipeline after an 18-month halt. Draft terms circulating in Baghdad would channel sales through SOMO, allocate a portion of flows for domestic use, and place producer proceeds in escrow—leaving legacy arrears to later negotiation. If sealed, the arrangement restores federal custody over cross-border marketing while giving Erbil a pathway to monetize output without unilateral exports—tightening Iraq’s grip on strategic revenue and border trade, and anchoring energy ties with a key Muslim neighbor (Türkiye) rather than extra-regional arbiters. (Reuters)

The Karbala solar inauguration marks Iraq’s first utility-scale renewable asset and a pivot toward a portfolio that can shave daytime peaks, cut fuel burn, and diversify away from politically contingent gas imports. With Babil (225 MW) under construction and a 1 GW Basra project queued, the pipeline of ~12.5 GW in planned solar, if realized, would supply a material share of demand. Translating ribbon-cuttings into delivered megawatt-hours will depend on grid upgrades and bankable PPAs; still, each commissioned megawatt reduces leverage external actors gain through gas and electricity waivers and strengthens indigenous control over essential services. (AP News)

That imperative sharpened this week as the U.S. refused to green-light Baghdad’s Turkmen-gas-via-Iran swap, nixing a workaround meant to cushion summer outages after sanctions waivers on paying Iran for power lapsed. The blocked deal underscores the vulnerability created by energy dependencies subject to third-party licenses. In the near term, it raises the premium on domestic gas capture (GGIP), fast-track LNG options, and renewables. Strategically, it hardens Baghdad’s case for a diversified energy posture less exposed to sanctions politics and more aligned with partners willing to trade on predictable terms. (Reuters)

On that front, Baghdad inked a joint-operations agreement with TotalEnergies, QatarEnergy LNG and Basra Oil, moving the Gas Growth Integrated Project, Artawi ramp-up, and the Common Seawater Supply Project into execution. The package captures flared gas for power, lifts southern oil capacity, and supplies water injection at scale—addressing chronic outages while monetizing a wasted resource. Structurally, it widens Iraq’s partner set beyond a single pole—deepening Gulf energy links and drawing in Asian EPC capacity—while keeping the state operator embedded in governance, a balance that strengthens fiscal autonomy and curbs room for extra-regional conditionality. (Reuters)

Finally, the Development Road advanced institutionally: Baghdad hosted a four-party technical round (Turkey, Qatar, UAE) and disclosed completion of the Oliver Wyman financial model; Muscat has now requested a seat at the table. A corridor that stitches Al-Faw to Turkey’s network and onward markets—augmented by telecoms and customs harmonization—reorients Iraq from a rentier cul-de-sac to a transit state. Broadening Muslim-world participation (Turkey, Qatar, UAE—and potentially Oman) both diversifies financing and embeds Iraq in regional supply chains under terms it co-authors, limiting the influence of actors seeking to route East-West trade away from Iraqi-controlled geography. (Iraqi News)

Overall, this week’s energy and logistics moves push in a coherent direction: re-centering federal control over export valves, cutting vulnerability to sanctions-mediated power shocks, and anchoring trade infrastructure with regional partners. If Baghdad can lock in the pipeline restart while accelerating gas capture and grid-ready renewables, it will incrementally consolidate security over revenue, borders and critical utilities—shrinking space for outside political leverage and aligning economic interdependence more tightly with neighboring Muslim states. (Reuters)