Iraq and Syria have officially signed an agreement to reconstruct an oil pipeline that will create an alternative export route, circumventing the Strait of Hormuz. This deal comes as tensions rise due to the ongoing conflict between the United States and Iran, as reported by Reuters.
The agreement was finalized in Washington during a summit focused on American investments in Iraq, attended by U.S. Secretary of Energy Chris Wright. The deal was signed by Bassem Abdul Karim Nasr, the Director General of Basra Oil Company, and Youssef Qablawi, the Director General of Syrian Petroleum Company.
This pipeline will connect the city of Kirkuk in northern Iraq to the Mediterranean coast of Syria, with a designed capacity of 700,000 barrels of oil per day, according to the U.S. Energy Information Administration (EIA). The pipeline has been inactive since 2003, having been damaged during the American invasion of Iraq.
Secretary Wright stated that the project could help increase Iraq’s oil production and lessen the country’s reliance on vulnerable export routes in the region.
Iraq, the second-largest oil producer in OPEC, has faced significant disruptions in maritime traffic through the Strait of Hormuz and currently depends heavily on exports via the Basra port in the Persian Gulf.
According to OPEC data, Iraq’s oil production has plummeted by over 50%, falling to approximately 1.9 million barrels per day in June, down from about 4.2 million barrels per day in February, just before the escalation of the U.S.-Israel-Iran conflict.
Several Gulf nations are investing in expanding their transport infrastructure to reduce dependence on the Strait of Hormuz. The United Arab Emirates is constructing a second pipeline to the port of Fujairah on the Gulf of Oman, while Saudi Arabia is considering increasing its pipeline capacity to the Red Sea by an additional 2 million barrels per day.
However, analysts caution that new pipelines may only partially mitigate geopolitical risks, emphasizing that Iran still possesses the capability to target energy infrastructure, including oil terminals, pumping stations, and storage facilities, regardless of the transport route for oil.
