Report: Iraq Seeks New Crude Oil Route Away From the Gulf

Iraq is preparing to send Basra crude by truck through Syria to the port of Baniyas, opening a new export option away from its main maritime route through the Gulf.

The Iraqi Oil Marketing Company, known as SOMO, is holding talks with the Syrian Petroleum Company on an agreement that would move crude from Basra to Baniyas storage tanks before loading it onto tankers. Iraq’s Cabinet has approved SOMO’s negotiations in principle, and the final agreement is expected after the company receives authorization to contract with its Syrian counterpart.

The trucks would load at either Zubair 1 or Zubair 2 in Basra province. Available storage capacity at Baniyas currently ranges from 1.5 million to 2 million barrels, but SOMO Director General Ali Nizar al-Shatry said shipments through the route would remain limited because the tanks are aging and need management and maintenance.

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We currently have no contracts to export crude oil through Syria, but negotiations are under way with Damascus to conclude an agreement for transporting oil by truck.

Syria already serves as a route for Iraqi fuel oil. About 21.4 million barrels of Iraqi fuel oil moved through Syria from the route’s launch in March through the end of August, including 5.91 million barrels in August, according to the Energy Research Unit database cited in the report.

The overland crude route is intended as a temporary and secondary option while Baghdad and Damascus pursue a planned pipeline to the Syrian coast. The pipeline could take several years to enter service. Iraq still depends chiefly on southern ports, and SOMO said the country shipped about 70 million barrels through Basra by sea in August despite the region’s military and security conditions.

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Land transport is a secondary option, not Iraq’s main export route.