Iraq and Syria signed an agreement on Friday to rebuild the pipeline that carries Iraqi crude to Syria’s Mediterranean port of Banias, marking Baghdad’s latest effort to secure an alternative export route after disruptions in the Strait of Hormuz exposed the risks of relying almost exclusively on Gulf shipping lanes.
The agreement was signed during the U.S. Chamber of Commerce’s Investment Summit in Washington, which focused on investment opportunities in Iraq and was attended by U.S. Energy Secretary Chris Wright. The deal was signed by Basim Abdul Karim Nasser, chief executive of Basra Oil Company, and Youssef Qablaoui, chief executive of the Syrian Petroleum Company.
Most of Iraq’s oil exports have been disrupted in recent months after shipping through the Strait of Hormuz stalled, preventing tankers from departing Basra’s ports. The disruption prompted the Iraqi government to accelerate long-standing plans to establish export routes to the Mediterranean and the Red Sea.
The project coincides with President Donald Trump’s effort to broaden U.S.-Iraq ties beyond security cooperation by encouraging American investment in Iraq’s energy sector. Baghdad is currently negotiating with several U.S. companies, led by Chevron, over oil projects and new export infrastructure.
Reviving a Dormant Route
The original Banias pipeline runs from the Kirkuk oil fields in northern Iraq to Syria’s Mediterranean coast, with an estimated export capacity of about 300,000 barrels per day. Built in the 1950s, it ceased operations in 1982 amid political tensions between the governments of Syrian President Hafez al-Assad and Iraqi President Saddam Hussein.
Several attempts have since been made to revive the pipeline, but disagreements over transit fees and revenue-sharing have repeatedly derailed negotiations.
A former Iraqi government adviser told MBN that serious talks with Syria have been underway for months on restoring the pipeline, which stretches from Kirkuk to Haditha before continuing to Banias.
The adviser, who said he remains familiar with the negotiations, said Iraq’s plans extend beyond rehabilitating the existing pipeline. They also include constructing a new pipeline linking the southern Basra oil fields to Haditha in western Iraq. From there, the route would split into three branches: one to Banias, another to Jordan’s Red Sea port of Aqaba, and a third northward into Turkey.
“We cannot rely on the old pipeline because its maximum capacity is only between 200,000 and 300,000 barrels per day, in addition to declining production from the Kirkuk fields,” the adviser said.
He added that the proposed pipeline would have a diameter of 56 inches, potentially increasing export capacity to around 2 million barrels per day.
“For now, the quickest solution is to rehabilitate the existing pipeline so it can resume operations soon,” he said. “But over the longer term, the strategy is to move southern Iraqi crude toward Banias.”
According to the adviser, Chevron is the leading contender to participate in the project’s development.
U.S. Support
A U.S. State Department official told MBN that Washington supports “supporting efforts by Iraq and Syria to increase their interconnectivity and build future routes for trade and prosperity through the rehabilitation and reconstruction of the Iraq-Syria crude oil pipeline.”
“We expect U.S. companies to play a role in advancing the pipeline construction,” the official added.
Chevron did not respond to a request for comment.
Earlier this month, a consortium including Chevron and Qatar’s UCC signed an agreement with Basra Oil Company to study potential pipeline routes, including the Basra-Haditha-Banias project, according to an Iraqi government statement.
Iraqi Prime Minister Ali al-Zaidi visited Chevron’s headquarters in Houston on Thursday as part of a five-day official visit to the United States that included a meeting with President Trump on Tuesday.
Al-Zaidi and Iraq’s oil minister also met with Chevron Vice Chairman Mark Nelson as Baghdad seeks to boost oil production and expand the role of American companies in the country’s energy sector.
Washington views the project as both an economic opportunity for U.S. companies operating in Iraq and Syria and as a strategic route that could reduce Iraq’s dependence on the Strait of Hormuz, limiting Iran’s ability to influence Iraqi oil exports during periods of heightened tensions in the Gulf.
U.S. Special Envoy for Iraq and Syria Tom Barrack said Friday that Trump’s vision of connecting Middle Eastern countries, combined with al-Zaidi’s economic agenda, was creating a new framework for regional cooperation.
In a post on X, Barrack said the emerging network linking Mesopotamia, the Levant, Turkey and the Gulf would make “the Strait of Hormuz far less consequential very soon”
“A new paradigm is afoot,” he wrote.
Economic Opportunities and Strategic Value
Yasar Al-Maliki, a Gulf analyst at MEES Publications and a nonresident senior fellow at the Atlantic Council, said the project could reduce some of Tehran’s leverage in regional energy markets.
“A restored Iraq–Syria pipeline would reduce Iraq’s dependence on Hormuz and weaken Iran’s ability to use disruption of the Strait as a source of strategic leverage. It would not eliminate that leverage, but it would give Iraq and potentially other Gulf producers additional options during periods of crisis.”
For Syria, the pipeline could restore part of its historical role as a regional energy transit corridor while generating transit revenues, supplying crude to domestic refineries, and reducing reliance on imported fuel at a time when the country faces chronic shortages and extensive reconstruction needs.
“For Syria, it’s the return of transit income, a recurring fee stream that turns its geography back into an asset for a state with little reliable revenue and a large reconstruction bill,” said Maisoon Kafafi, Middle East programs adviser at the Atlantic Council.
Major Challenges Remain
The project, however, still faces significant financial, security and technical obstacles.
The Syrian section of the pipeline stretches roughly 800 kilometers (500 miles) and has suffered extensive damage after decades of neglect and years of war. Restoring it is expected to require billions of dollars.
In Iraq, transporting southern crude to Banias would require completing the pipeline connecting the Basra fields to Haditha, a project that will require additional funding and years of construction.
Parts of the proposed route also pass through western Iraq and eastern Syria, where Islamic State militants remain active and government control remains limited in some areas.
Iraqi economist Abdul Rahman Al-Mashhadani pointed to another challenge: Iraq’s export markets.
Most Iraqi crude is sold to East Asian countries rather than Europe or the United States.
“Our primary markets are in East Asia because Iraqi crude is well suited to refineries in countries such as India, Bangladesh, China and Pakistan,” Al-Mashhadani told MBN.
“If those countries were to import Iraqi oil through Banias instead, tankers would require roughly 10 additional days to reach their destinations, which would increase shipping costs,” he said.
Even so, supporters argue that the pipeline would provide Iraq with an emergency export route whenever Gulf shipping is disrupted, as has been the case during the current crisis, in which tanker traffic has been halted for months, costing Baghdad billions of dollars in lost revenue each month.
“It functions as insurance against losing a route rather than a reorientation of where the oil actually goes,” Kafafi said.
“For Iraq, it’s a fiscal lifeline: the state runs almost entirely on crude that leaves through a single strait, so a western-facing route reduces how much solvency rides on one waterway staying open,” she added.
Adapted and translated from the original Arabic.
