MONTREAL (Oil Monster): Iraq is moving closer to establishing an overland crude oil export route through Syria to the Mediterranean, giving Baghdad another option for moving barrels outside the Strait of Hormuz as Gulf shipping risks remain elevated.
Iraqi authorities have asked Damascus to facilitate shipments of crude oil and petroleum products across Syrian territory to the Mediterranean coast, according to Syrian Petroleum Company CEO Yousef Qablawi.
Qablawi said an agreement between the two governments is nearing completion and that the first crude-oil truck convoys could reach Syria as early as mid-October.
The proposed arrangement would give Iraq another path to international oil markets without requiring crude to transit the Strait of Hormuz.
Under the concept being discussed, Iraqi crude would move westward by road across Syria to the Mediterranean port of Baniyas.
The Syrian Petroleum Company plans to make storage tanks available at Baniyas, where crude arriving by truck could be accumulated before being transferred onto tankers for overseas delivery.
The route would expand an existing logistics corridor already used to move Iraqi petroleum products across Syria.
Qablawi said the agreement between Baghdad and Damascus was close to completion and indicated that crude shipments could begin soon after a deal is finalized.
He said the first convoy carrying Iraqi crude could potentially arrive in Syria by the middle of October.
The timing remains provisional because the two governments have not yet announced a finalized export agreement.
Iraq already transports fuel oil to Syria by road.
Qablawi said approximately 1,000 trucks currently make the trip each day, with each vehicle carrying as much as about 220 barrels.
At that loading rate, 1,000 trucks would represent maximum transport capacity of roughly 220,000 barrels per day.
However, those existing movements involve fuel oil. A crude-export program would require its own logistics arrangements and potentially a larger trucking fleet.
Even a large trucking operation would remain small relative to Iraq's total crude exports.
The Iraqi Oil Ministry said in September that crude exports were averaging approximately 2.6 million barrels per day through September 21 despite continuing disruptions around Hormuz.
Later reporting put the full-month export level at roughly 2.7 million bpd.
The Syrian corridor therefore would not replace Iraq's southern export system. Its strategic value would come from providing another outlet when Gulf shipping is constrained.
ALSO READ:
Iraq Oil Exports Recover as Discounts Draw Major Buyers
Iraq has historically relied heavily on southern Gulf terminals to move crude into international markets.
The Iran conflict and repeated disruption around the Strait of Hormuz have exposed the financial risk of that dependence.
Iraq's economy relies heavily on oil-export revenue, making reliable access to international buyers a central government priority.
Recent shipping problems have already reduced export volumes from levels seen before the conflict.
Iraq's interest in Syria is part of a wider reassessment of energy logistics across the Middle East.
Oil producers and international companies are increasingly examining export infrastructure that would reduce dependence on Hormuz and other strategic maritime chokepoints.
TotalEnergies CEO Patrick Pouyanné said this week that additional Iraqi pipeline connections through Syria could form part of a more resilient regional export system.
Other international producers are also studying additional routes for northern Iraqi crude and potential new links to Mediterranean markets.
Baniyas gives the proposed route access to the Mediterranean Sea, allowing crude transported across Syria to be loaded onto tankers without entering the Persian Gulf.
The viability of the route would depend on road capacity, storage availability, port infrastructure, transport costs and security conditions along the corridor.
Truck transportation is considerably less efficient than a large oil pipeline, but it can be deployed more quickly and provide flexibility during periods when conventional export routes are disrupted.
The immediate proposal centers on road transport, but the current energy crisis has revived wider discussion about pipeline infrastructure linking Iraqi crude production with Mediterranean ports.
A large pipeline would be capable of carrying substantially more oil than truck convoys and could give Iraq a strategically meaningful long-term alternative to Gulf exports.
No new Iraq-Syria crude pipeline has been approved under the arrangement currently being discussed.
Despite transportation constraints, Iraqi crude has become increasingly important to buyers seeking alternatives to disrupted Iranian and other Middle Eastern supplies.
Chinese independent refiners have recently increased purchases of Iraqi grades, while regional trading companies have also secured significant volumes.
The demand creates an additional incentive for Baghdad to expand the number of routes available for getting barrels to international buyers.
ALSO READ:
ADNOC Trading Buys Millions of Barrels of Iraqi Crude
The immediate milestone will be completion of the proposed agreement between Iraq and Syria.
If finalized on schedule, the first crude truck convoys could begin moving toward Baniyas in mid-October.
The initial shipment volumes will be important because they will show whether the overland corridor can become a meaningful supplementary export route or remain primarily an emergency logistics option.
Longer term, Iraq's interest in pipelines and other Mediterranean export infrastructure could prove more significant than the truck route itself as Baghdad looks to reduce its dependence on the Strait of Hormuz.
Sources: Bloomberg; Syrian Petroleum Company; Iraqi Ministry of Oil.
