A key agreement governing the Iraq-Türkiye Crude Oil Pipeline is nearly impossible to finalize before its expiration on July 27, prompting Ankara to push for a temporary arrangement to keep crude flowing.

Energy and Natural Resources Minister Alparslan Bayraktar told reporters ahead of a Cabinet meeting that Türkiye has already notified Iraq of its decision to let the current framework lapse.

Ankara instead intends to replace the decades-old treaty with a broader energy cooperation framework.

The original agreement, first signed in 1973 and extended for 15 years in 2010, governs the Kirkuk-Ceyhan pipeline, which transports northern Iraqi crude to Türkiye’s Mediterranean export terminal.

"We sent them a draft of a new agreement last year, but Iraq held elections and a new government has only recently taken office," Bayraktar said, noting that the remaining three-week window is too narrow to finish negotiations.

To avoid disrupting vital crude shipments, Türkiye has proposed that its state pipeline operator, BOTAS, transport Iraqi oil under a one-year interim contract.

Under this temporary deal, Türkiye would reserve 750,000 barrels per day of capacity, matching Baghdad's request, despite current flows only averaging 180,000 to 200,000 barrels daily.

Ankara’s decision to transition away from the existing treaty stems from repeated arbitration disputes and underutilized pipeline capacity.

Beyond the short-term fix, Türkiye is pitching an ambitious expansion to extend the pipeline from Kirkuk to Basra, raising total capacity to 2.5 million barrels per day.

Bayraktar also proposed letting other Gulf nations like Kuwait use the line, alongside a potential parallel natural gas pipeline.

However, outstanding legal and financial hurdles remain. Iraq previously won a Paris-based arbitration ruling ordering Türkiye to pay $1.5 billion in damages for facilitating unauthorized Kurdish oil exports between 2014 and 2018.

Türkiye has appealed, citing its own outstanding claims against Baghdad.

"There will be calculations of mutual claims and interest because our receivables go back many years," Bayraktar said. "Then we will see who the creditor is."