Iraq and Syria Near New Agreement for Crude Oil Land Export

Baghdad is moving towards finalizing an imminent agreement with Damascus for the overland export of Iraqi crude oil to Syria's Baniyas port. This strategic move aims to diversify export outlets and reduce reliance on traditional maritime routes, as Iraq seeks to enhance its export flexibility. Ali Nazar Al-Shatri, Director General of the Iraqi State Oil Marketing Organization (SOMO), revealed ongoing intensive discussions with the Syrian Petroleum Company to conclude an agreement for transporting Basra crude by tankers. Al-Shatri explained that this agreement, anticipated to be signed soon following approval by the Iraqi Council of Ministers and SOMO's authorization, will enable the transfer of crude quantities from Zubair 1 or Zubair 2 stations in Basra Governorate to Syrian storage tanks in Baniyas. Al-Shatri indicated that the currently available storage capacity in Baniyas port tanks ranges between 1.5 and 2 million barrels. He noted that the quantities transported via this route would be limited due to the aging state of the tanks and their need for maintenance. He described overland tanker transport as a secondary option, not a primary export route, but a significant addition to boost export volumes alongside sea shipments. This initiative continues Iraq's use of the Syrian route, which has already been utilized for fuel oil exports this year. From March through the end of last August, Iraqi fuel oil exports via Syria reached approximately 21.4 million barrels, including 5.91 million barrels in August alone. These shipments are transported overland to Baniyas, then stored and loaded onto tankers bound for international markets. The current move is part of Iraq's broader vision to diversify its export resources, moving away from total dependence on southern ports, through which the country exported about 70 million barrels of oil by sea last August. Al-Shatri affirmed that shipping operations through these ports continue despite military and security challenges in the region. In parallel with the tanker transport plan, diligent efforts are underway between Baghdad and Damascus to construct a strategic pipeline for transporting Iraqi oil to the Syrian coast. This ambitious project, approved by the Iraqi Council of Ministers in June 2026, aims to provide Iraq with a new outlet to the Mediterranean Sea, bypassing the Strait of Hormuz. It encompasses the transfer of Basra crude of light, medium, and heavy grades. Estimates suggest that the pipeline project will take several years to become operational. Therefore, overland tanker transport offers a faster and effective solution to commence exporting limited quantities of crude via Baniyas until the necessary infrastructure for a larger, more sustainable route is developed. The new export route through Syria grants Baghdad greater flexibility in managing its oil exports, mitigating potential risks from any disruptions to vital navigation in the Strait of Hormuz, while maintaining southern ports as the primary outlet for Iraqi exports. This diversification enhances Iraq's economic security amidst market fluctuations and geopolitical conditions.