Iraq-Turkey Pipeline Explosion... Increasing Pressure on International Oil Prices (Comprehensive)

On the 18th (local time), gasoline and diesel prices are displayed at a gas station in Paris, France. [Image source=Yonhap News]

The recent explosion of a pipeline connecting Iraq and Turkey is expected to further destabilize the already soaring international oil prices.

On the 19th, according to Bloomberg and Sputnik News, BOTA?, the Turkish state-owned company operating the pipeline from Kirkuk in northern Iraq to Ceyhan in southern Turkey, confirmed the explosion and reported that the fire was extinguished through emergency firefighting efforts and cooling operations are currently underway.

The pipeline involved in the accident is a major crude oil transportation route starting from Iraq, passing through the Mediterranean port of Ceyhan, and connecting to European refineries. The explosion occurred in Karamanmara?, Turkey, 511 km away from Ceyhan.

Bloomberg cited a senior Turkish official explaining that the pipeline operation was temporarily halted due to the fire following the explosion but was soon restarted, and the flow in the pipeline has returned to normal levels.

BOTA? did not specify the exact cause of the accident. However, Turkish authorities are reportedly suspecting the explosion to be a deliberate attack.

In fact, this pipeline has previously been targeted by the Kurdistan Workers' Party (PKK), an armed faction advocating Kurdish independence within Turkey. The recent explosion occurred shortly after the Turkish military killed dozens of Kurdish militants in Syria.

The PKK is designated as a terrorist organization by both the United States and Turkey.

Last year, an average of 450,000 barrels (71.5 million liters) per day passed through this pipeline into Europe. Therefore, the explosion is expected to deal a significant blow to the already rapidly rising international oil prices.

Geopolitical tensions have increased, with Yemeni rebels attacking oil facilities in the United Arab Emirates (UAE), a major oil-producing country, pushing international oil prices to their highest levels in seven years.

On the 18th (local time), February delivery West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) closed at $85.43 per barrel, up 1.9% ($1.61).

Bloomberg also noted that while it is unclear how quickly the damaged pipeline will be restored, the explosion is expected to have a significant impact on oil prices.