Iraq Set to Reopen Own Pipeline as Kurdish Talks Stall

Iraqi flag in front of an oil field (AFP)
Iraqi flag in front of an oil field (AFP)
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Iraq Set to Reopen Own Pipeline as Kurdish Talks Stall

Iraqi flag in front of an oil field (AFP)
Iraqi flag in front of an oil field (AFP)

Baghdad is repairing a pipeline that could allow it to send 350,000 barrels per day (bpd) to Türkiye by the end of the month, an Iraqi deputy oil minister said on Monday, a step likely to rile oil foreign companies and the Kurdistan Regional Government (KRG).

The reopening of the Kirkuk-Ceyhan pipeline, which has been shut for a decade, would provide a rival route to a pipeline from the Kurdistan region that has been shut for a year as talks between Baghdad and the KRG on resuming exports have stalled.

Baghdad deems production-sharing agreements between the Kurds and foreign companies using the KRG's pipeline illegal.

The federal government in Baghdad will require oil companies to negotiate with it to sell their oil via the revived pipeline to Türkiye, potentially angering the Kurds who rely on almost entirely on oil revenue, according to Reuters.

Exports via the 960 km (600 mile) pipeline were halted in 2014 after repeated attacks by ISIS militants. It once handled about 0.5% of global supply.

"Repair works are ongoing and a major crude pumping station with storage facilities has been completed. The pipeline is likely to be operational and ready to restart flows by the end of this month," Basim Mohammed, Iraqi deputy oil minister for upstream affairs, told Reuters.

Repairing damaged sections inside Iraq and completing one essential pumping station will be the first stage of operations to bring the pipeline back to full capacity, he said.

The KRG's pipeline was halted on March 25, 2023, after an arbitration court ruled it violated provisions of a 1973 treaty by facilitating oil exports from the semi-autonomous Kurdish region without Baghdad's consent.

Negotiations to restart it have faltered as Türkiye, the KRG and the federal government have made conflicting demands.

Two Iraqi oil officials and a government energy adviser, speaking on condition of anonymity, said Baghdad had balked at a Kurdish demand that the federal government pay a $6 per barrel transit fee to Russian oil firm Rosneft, which partly owns the pipeline.

"Iraqi oil ministry officials told the Kurdish negotiating team they consider the agreement between KRG and Rosneft illegal and a violation of valid Iraqi laws," said Kurdistan region-based energy adviser Bahjat Ahmed who was briefed about the talks.



Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)
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Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)

Business conditions in Saudi Arabia’s non-oil private sector improved notably in June, driven by a marked rise in customer demand and expanded production, according to the latest Riyad Bank Purchasing Managers’ Index (PMI) data.

New business volumes surged, fueling the fastest pace of employment growth since May 2011. This strong demand for workers pushed wage costs to record highs, adding pressure on overall expenses and contributing to a fresh increase in output prices.

The headline PMI climbed to 57.2 in June from 55.8 in May - its highest level in three months and slightly above the long-term average of 56.9. The reading signaled a robust improvement in the health of the non-oil private sector economy.

Companies reported another rise in new orders last month, with growth accelerating following a recent low in April. Many firms cited gaining new clients, alongside improved marketing efforts and stronger demand conditions. Domestic sales were the main driver of the increase, while export sales edged up slightly.

Purchasing Activity Expands

Production continued to expand through the end of Q2, although growth slowed to a 10-month low. Purchasing activity picked up sharply as companies sought to secure additional inputs to meet rising demand, with the pace of purchase growth reaching its fastest in two years.

Employment growth accelerated as businesses rapidly expanded their workforce to keep pace with incoming orders, pushing hiring to the highest level since mid-2011. This strong recruitment trend, which began early in 2025, was largely driven by a rising need for skilled workers, prompting companies to increase salary offers. Consequently, overall wage costs rose at the fastest rate since the PMI survey started in 2009.

Facing mounting cost pressures from higher raw material prices, firms raised their selling prices sharply in June , the biggest increase since late 2023, reversing declines recorded in two of the previous three months. This price hike largely reflected the passing of higher operating costs onto customers, although some companies opted for competitive pricing strategies by cutting prices.

Resilient Economic Outlook

Looking ahead, non-oil private sector firms remained confident about business activity over the next 12 months. Optimism hit a two-year high, supported by resilient domestic economic conditions, strong demand, and improved sales. Supply-side conditions also showed positive momentum, with another strong improvement in supplier performance.

Dr. Naif Alghaith, Chief Economist at Riyad Bank, said: “Future expectations among non-oil companies remain very positive. Business confidence reached its highest level in two years, underpinned by strong order inflows and improving local economic conditions.”

He added: “However, cost pressures became more pronounced in June, with wage growth hitting record levels as companies compete to retain talent. Purchasing prices also rose at the fastest pace since February, partly driven by increased demand and geopolitical risks. Despite these challenges, companies broadly raised selling prices to recover from May’s declines, reflecting an improved ability to pass higher costs onto customers.”