(BAGHDAD, IRAQ) – Iraq plans to build oil pipelines across Syrian territory to the Mediterranean Sea, opening a new export route for Iraqi crude to world markets as the government presses ahead with a broader programme of energy infrastructure development.
The Iraqi cabinet authorised the director general of Basra Oil Company to sign a memorandum of understanding with Syria’s Ministry of Oil for the pipeline construction project. The proposed pipelines would connect Iraqi oil fields directly to Mediterranean export terminals, offering an alternative to the existing route through the Strait of Hormuz.
The government also directed the oil minister to sign a memorandum with a consortium comprising ConocoPhillips, TI Capital and Novaterra to begin talks on the assessment, exploration and development of the Akkas field and adjacent areas. The Akkas gas field, located in Anbar province, is one of Iraq’s largest non associated gas reserves.
The Ministry of Oil will issue a tender for the Integrated Qayara project, which involves the development of oil infrastructure and the expansion of production capacity. The cabinet also approved a tender for the drilling of an exploration well in the Kara Tappa area.
Separately, the Iraqi government announced the activation of a framework agreement with Turkey on water resource cooperation. The financing mechanism for projects under this agreement will take effect from 1 September.
The pipeline initiative comes as global energy markets contend with significant disruption. Brent crude currently trades at $90 per barrel (around £71 or €82). The Strait of Hormuz, through which roughly 20 million barrels of oil pass daily, has been effectively closed to normal commercial shipping due to the conflict between the United States and Iran. The daily value of oil transiting the strait at current prices stands at approximately $1.8 billion (around £1.4 billion or €1.6 billion).
A Mediterranean export route through Syria would allow Iraq to bypass the Hormuz chokepoint entirely. Iraq currently exports the majority of its crude, averaging around 3.3 million barrels per day, through its southern terminals on the Persian Gulf. At $90 per barrel, daily Iraqi exports are worth approximately $297 million (around £233 million or €272 million).
Central banks of the Group of Seven nations are preparing for interest rate decisions against a backdrop of rising oil prices, according to Bloomberg. Sustained high energy costs complicate the outlook for inflation and monetary policy across advanced economies.