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Russia-Ukraine War 2026
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Iraq ramps Ceyhan pipeline toward 770kbd

3 min read
19:51UTC

Iraq is raising Kirkuk-Ceyhan pipeline throughput from 220kbd toward a 770kbd target over roughly two and a half months, the first new European-accessible crude route since the conflict began.

ConflictDeveloping
Key takeaway

Ceyhan is the first real new supply lever, and its medium sour grade is what makes it count.

Iraq is ramping the Kirkuk-Ceyhan pipeline from 220kbd (thousand barrels per day) toward a 770kbd target over roughly two and a half months 1. The line carries crude from the Kirkuk fields to Ceyhan, Turkey's Mediterranean export terminal, delivering oil to European refiners without touching the Gulf. The push comes as Iraq's southern output fell 70% to 1.3mbd and its seaborne exports dropped 97% in May, so the northern pipeline is replacing collapsed southern volume.

Oil funds about 90% of Iraqi state revenue, which makes the ramp a fiscal necessity rather than an opportunistic grab for market share. With the south choked, Baghdad has to push crude through the only export artery still open to it.

Kirkuk's medium sour barrels map directly onto the feedstock Mediterranean refiners lost when Russian Urals and Iraqi Basra supply tightened, so the addition matters by grade as much as by volume. That substitution, rather than the headline barrel count, is why a full ramp to 770kbd would rank as the largest European-accessible crude addition of the conflict so far. Where early-May freight priced a Hormuz-wide closure with the VLCC TD3C route near WS458 , Ceyhan reframes the question from how to avoid the Gulf to whether the Mediterranean can be loaded fast enough to refill it.

Deep Analysis

In plain English

Iraq has two main ways to get its oil to buyers. The first is southern ports in the Gulf, which use supertankers, but those tankers cannot easily pass through the Strait of Hormuz blockade right now. The second is a long pipeline running north through Iraq and Turkey to the Mediterranean coast at Ceyhan. Iraq is now trying to push as much oil as possible through that northern pipeline, ramping it from its current 220,000 barrels a day up to a target of 770,000. That oil would reach European refineries much more easily than Gulf oil right now. The problem is that this pipeline has had political disputes for years over who controls the oil fields and who gets paid what, so getting it to full capacity is not straightforward.

Deep Analysis
Root Causes

Iraq's southern seaborne exports collapsing 97% to 1.3mbd reflects the Hormuz closure's direct impact on a country that routes most of its southern production through Basra Oil Terminal and Al-Faw, both of which require VLCC tankers that cannot safely transit a blockaded strait. Unlike Kuwait, which also has southern port dependency, Iraq has the Kirkuk-Ceyhan alternative.

Activating that alternative at scale requires resolving three overlapping constraints simultaneously: the Erbil-Baghdad lifting rights dispute, pipeline integrity maintenance deferred during the years of low utilisation (220kbd for most of 2024-25), and Turkey's transit tariff demands which EPDK has historically leveraged as a fiscal policy instrument.

What could happen next?
  • Opportunity

    A fully ramped Kirkuk-Ceyhan at 770kbd would add roughly one-third of Libya's total export programme to Mediterranean supply, providing a partial offset for the Gulf closure that European refiners have not had since April.

  • Risk

    The KRG-Baghdad fiscal dispute and Turkey's transit leverage mean the ramp could stall or reverse if payment terms collapse, as they did during the 2022-2023 shutdown.

First Reported In

Update #6 · OPEC's quota is fiction at a 37-year low

OilPrice.com· 8 Jun 2026
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Causes and effects
This Event
Iraq ramps Ceyhan pipeline toward 770kbd
Kirkuk's medium sour slate substitutes for the Basra and Urals feedstock Mediterranean refiners lost, so a 550kbd addition could soften Med sour differentials on grade match alone, independent of where the flat price sits.
Different Perspectives
Turkey
Turkey
Turkey, a major buyer of Russian diesel cargoes, loses that access under Moscow's first producer-binding export ban, in force from 8 July to 31 July. Ankara hosted the same week's NATO summit pledging EUR 70bn to Ukraine, sitting on both sides of the fuel-and-alliance ledger.
NATO
NATO
NATO leaders meeting in Ankara on 7 and 8 July pledged EUR 70bn in equipment, assistance and training for Ukraine across 2026, with a 2027 sustainment commitment and a $40bn Drone Edge counter-drone initiative. European allies now fund the vast majority of that package, filling the gap left by Washington's idled crude waiver.
India
India
India's state refiners continued buying discounted Urals crude as June's price fell to $63.18 a barrel, insulating New Delhi from the OFAC waiver gap still constraining Western buyers. Indian refiners could pick up diesel-export share as Russia's producer-binding ban shuts out its former customers.
China
China
China's independent refiners kept importing discounted Urals crude through June as the price fell to $63.18 a barrel, down 26% month-on-month per CREA. Beijing has said nothing on Moscow's new diesel ban, leaving Chinese refiners a likely beneficiary if Turkish and Brazilian buyers seek replacement cargoes.
United States
United States
No successor licence has been issued since General License 134C lapsed on 17 June, leaving a 26-day gap, the longest of the war, in the Russian crude waiver. Washington's silence is tightening the channel without any stated decision, as Treasury weighs whether to let it die.
Ukraine
Ukraine
Ukraine's long-range strike campaign shifted from refineries to seaborne fuel tankers crossing the Sea of Azov, cutting tracked vessel traffic 55% between 30 June and 11 July, per Starboard Maritime Intelligence. The shift targets Russia's export revenue directly rather than just domestic supply, adding pressure alongside the collapsing Urals price.