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European Oil Markets
11JUN

Iraq's Ceyhan backstop stalls at 190kbd

3 min read
08:58UTC

Kirkuk-Ceyhan throughput has settled near 190kbd against a 770kbd cabinet target, leaving the non-Hormuz medium-sour barrels Med refiners were promised stuck behind allocation, not in transit.

EconomicDeveloping
Key takeaway

Kirkuk-Ceyhan stuck at 190kbd against a 770kbd target leaves Med refiners short and the TD19 freight bid intact.

Iraq's Kirkuk-Ceyhan pipeline throughput has stabilised near 190kbd, well short of the 770kbd that the cabinet framed the line as ramping toward . 1 The pipeline carries northern Iraqi crude to the Turkish Mediterranean port of Ceyhan, and it was billed as the primary non-Hormuz backstop, a route that keeps Med refiners supplied without depending on the contested Gulf chokepoint. Iraqi officials are now discussing a push to a 500-650kbd range, but the most recent data has northern exports flat near 190kbd rather than climbing.

Total Iraqi output sits near 1.4mbd against 4.2mbd before the conflict, with southern seaborne routes down roughly 97%. The medium-sour grades that Med refiners were promised as Hormuz insurance are not arriving on the schedule the cabinet set, which leaves the relief that traders had penned in for the basin notional rather than physical.

That shortfall feeds straight into freight. Higher Ceyhan liftings would generate more cargoes on the TD19 route, the Mediterranean Aframax benchmark, and the scramble for non-Hormuz medium sour had already driven that rate to WS228 on 6 June . A ramp stuck at 190kbd leaves the Med supply-short and the freight bid intact, reinforcing the same prompt tightness that the backwardated curve is pricing in crude. No fresh TD19 print landed in the 9 to 11 June window to confirm a move off WS228, so the freight squeeze is unconfirmed but unrelieved.

Deep Analysis

In plain English

Iraq has a pipeline that runs from the Kirkuk oilfields in northern Iraq to the port of Ceyhan on Turkey's Mediterranean coast, completely bypassing the Strait of Hormuz where much of Iraq's oil is now blocked. When the Gulf blockade hit, this pipeline was meant to be ramped up dramatically to replace the southern exports that can no longer get through. The problem is that the pipeline is barely moving more oil than before about 190,000 barrels a day, against a target of 770,000. This matters to European refineries that buy Iraqi medium-grade oil, because they cannot get the barrels they need. Shipping costs for tankers that take the Ceyhan oil to southern European ports have spiked, adding to the cost of fuel that ultimately flows through to European consumers.

Deep Analysis
Root Causes

Three compounding constraints explain the 190kbd ceiling.

First, the KRG revenue dispute. Baghdad assumed direct control of Kirkuk liftings after the March 2023 ICC ruling, but the Erbil-Baghdad revenue-sharing formula for northern production remains contested. Kurdish field operators have used the ambiguity to slow field deliveries to the pipeline, keeping volumes near levels that avoid triggering the contested revenue trigger.

Second, compressor station capacity on the Iraqi side. The Fish Khabur compressor and the Baiji junction both require refurbishment to sustain flows above 300kbd. Neither has a confirmed recommissioning timeline in the 9-11 June window.

Third, Ceyhan's tanker scheduling and storage fill state. A rapid ramp in Kirkuk-Ceyhan throughput requires corresponding Aframax availability at Ceyhan terminal, and storage fill constraints at the loading terminal limit the ramp rate independent of pipeline pressure. At WS228 on 6 June, Aframax availability is bid but not infinite.

What could happen next?
  • Consequence

    TD19 Med Aframax rates at WS228 remain structurally bid as long as Kirkuk-Ceyhan throughput stays near 190kbd, keeping the freight component of Mediterranean medium-sour delivered costs elevated by approximately $1.50-1.80/bbl above pre-conflict norms.

    Short term · Assessed
  • Risk

    A further political stop on KRG field deliveries, analogous to the March 2023 halt, could reduce Ceyhan loadings toward zero again, collapsing the last meaningful non-Hormuz medium-sour supply route for Mediterranean buyers.

    Medium term · Reported
  • Opportunity

    A confirmed Baghdad-Erbil revenue deal unlocking field deliveries above 300kbd would be the fastest path to meaningful TD19 rate compression, materially reducing Mediterranean medium-sour procurement costs before the end of Q3 2026.

    Medium term · Reported
First Reported In

Update #7 · Distillate deficit deepens as runs max out

Iraqi News· 11 Jun 2026
Read original
Causes and effects
This Event
Iraq's Ceyhan backstop stalls at 190kbd
A stalled ramp keeps the Mediterranean supply-short and the TD19 freight bid intact, because the barrels that would relieve it are not arriving.
Different Perspectives
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