Turkey’s ruling Justice and Development Party (AKP) is seeking to offset a $1.47 billion international arbitration penalty in a US enforcement case by counting it against decades-old Iraqi debts, opposition lawmaker Deniz Yavuzyılmaz said in a post on X, citing court filings in Washington.
Yavuzyılmaz, a deputy chair of the main opposition Republican People’s Party (CHP), said documents from the US District Court for the District of Columbia show that Turkey is attempting to treat the penalty as part of claims dating back to 1990.
The case stems from a final arbitration ruling ordering Turkey to pay $1,471,390,486 to Iraq over unauthorized crude oil exports through the Iraq–Turkey crude oil pipeline.
US enforcement case
Iraq’s Ministry of Oil filed a petition in April 2023 asking the Washington court to recognize, confirm and enforce the arbitration award under the New York Convention and the US Federal Arbitration Act.
Court documents show Iraq is seeking entry of judgment for the full award amount plus interest. Turkey has challenged the arbitration ruling in French courts, while enforcement proceedings in the United States are ongoing.
Yavuzyılmaz said the government is attempting to use the US enforcement process to offset the penalty against Turkey’s pre-2003 receivables from Iraq, a move he described as an effort to deflect responsibility for the arbitration ruling.
Pipeline dispute
The dispute is tied to oil shipments carried out between May 2014 and September 2018 through the Iraq–Turkey crude oil pipeline.
An International Chamber of Commerce tribunal ruled in February 2023 that Turkey violated pipeline agreements by allowing crude produced by Iraq’s Kurdistan Regional Government (KRG) to be exported without approval from Iraq’s federal government.
The tribunal ordered Turkey to reimburse Iraq for overpaid transportation fees. Ankara halted flows through the pipeline after the award and sought annulment in France, a remedy arbitration lawyers say is rare and limited to procedural grounds.
Alleged missing funds
In August and December 2025, Turkish Minute reported on Yavuzyılmaz’s claims regarding the handling of transportation fees paid by the KRG.
He said Deloitte-verified KRG oil reports show $2.32 billion in tariff payments to the Turkish Energy Company, a Jersey-registered firm tied to Turkey’s side of the trade, during the same period.
According to Yavuzyılmaz, $904 million was transferred to state pipeline operator BOTAŞ, while the remaining $1.416 billion was not accounted for.
The arbitration award itself does not document any transfer from the Turkish Energy Company to BOTAŞ or any missing balance. Those elements are Yavuzyılmaz’s claims based on his reading of the Deloitte reports and Turkish audit records.
In December he further alleged that the Jersey-based company was later shut down and replaced by a similarly named firm registered in Ankara after the transactions drew international scrutiny.
No domestic investigation
Despite the arbitration ruling, Yavuzyılmaz has said no investigation has been launched in Turkey into the oil shipments or the financial transactions he described.
Instead, prosecutors opened an investigation into the lawmaker for publicly disclosing the arbitration decision and related documents.