Iraq eyes new crude export routes after Iran war

Iraq is pushing ahead with plans to diversify its crude export routes, including via Syria, after seeing the closure of the Strait of Hormuz during the Iran war slash loadings, the oil ministry said July 13.

In a statement to the state-run Iraq News Agency, oil ministry spokesman Salim Rikabi confirmed that the ministry is exploring new outlets for its oil, including through a proposed pipeline to the Syrian port of Banias.

"The latest Council of Ministers decision implies the signing of an HOA agreement and information confidentiality agreement with an American and Qatari coalition to carry out... technical studies and the project basic design drawings," Rikabi said of the Syria plan.

He added that "the HOA doesn't entail any financial and contractual commitment on the oil ministry."

On July 4, the government body gave its approval to Basrah Oil Co. to sign the agreement with US-based Capital TI, Qatar's UCC and Chevron to study two alternative oil export pipelines, the oil ministry said at the time.

The first pipeline would run from Basrah to Haditha, Kirkuk and then the Turkish port of Ceyhan, while the second would run from Basrah to Haditha and then Banias, the oil ministry said.

The two pipelines are officially considered "strategic projects," according to the statement. The potential nameplate capacity of the mooted links is not yet clear.

The developments come as Iraq's Prime Minister Ali al-Zaidi visits Washington to discuss, among other things, energy cooperation.

In April, Iraq's state-owned SOMO started exporting Iraqi crude and fuel oil by truck to Banias for export to European markets, INA reported April 16 citing a SOMO statement, as part of "efforts to find other outlets to maximize Iraqi exports." It followed the change in leadership in Syria in January 2025, with Ahmed al-Sharaa replacing longtime ruler Bashar al-Assad.

Iraq currently relies on two main export routes: the port of Basrah in the Persian Gulf -- which handles the vast majority of Iraqi crude loadings -- and the Iraq-Turkey Pipeline from Kirkuk to Ceyhan via Iraqi Kurdistan, whose producers also use the pipeline.

Seaborne crude exports from Basrah rose threefold month over month to 870,000 b/d in June following the partial resumption of crude flows through the Strait of Hormuz, SOMO data shows, but remained well below the 3.6 million b/d it exported in February, prior to the war.

Meanwhile, exports from Ceyhan via the pipeline averaged 230,000 b/d in June -- roughly half of historic pipeline flows. Some 176,000 b/d of the total was federal Iraqi crude, according to SOMO data.

OPEC's second-largest producer produced 4.22 million b/d of crude in February, according to the Platts OPEC Survey from S&P Global Energy, but the lack of alternative export routes has seen that fall below 2 million b/d from March to June, the survey found.

The country produces medium and heavy Basrah crude, which is popular in Asia and elsewhere.