Iraq and US sign sweeping oil and infrastructure deals
In a significant move to diversify its energy export routes, Iraq has finalized a series of agreements with American companies, including a major deal to rebuild the long-defunct Kirkuk-Baniyas crude oil pipeline, which would connect Iraqi oilfields to Syria's Mediterranean coast. The preliminary deals were signed at a US-Iraq business summit at the US Chamber of Commerce in Washington on Friday, according to reports.
The Iraqi leader's media office said on Saturday that a total of 48 agreements, memoranda of understanding, cooperation agreements, and partnership declarations were signed between public and private sector entities in Iraq and the United States. These include "cooperation and partnerships involving the ministries of oil and electricity... with ExxonMobil, KBR, GE Vernova, Shell and Halliburton," as well as several deals related to the construction of a major crude oil pipeline between Iraq and Syria. Iraq also signed a deal with Starlink, the satellite communications company, to introduce services to the country.
The centerpiece of the agreements is the reconstruction of the Iraq-Syria crude oil pipeline, which runs from the oil-rich Kirkuk region in northern Iraq to Syria's Baniyas port on the Mediterranean. Iraq's state news agency reported that major US energy company Chevron would carry out the project under the agreement.
The US Department of State issued a statement welcoming Iraq and Syria's plan to rehabilitate the pipeline, saying a "US-led international consortium" would "execute the technical and financial aspects" of the project. The State Department described the pipeline as "a critical energy corridor linking Iraqi oil production to Mediterranean export markets and beyond," adding that upon rehabilitation, it would have an initial transport capacity of 2 million barrels per day of crude oil.
Reducing reliance on the Strait of Hormuz
The agreements come as Baghdad seeks to move away from dependence on the Strait of Hormuz, a vital chokepoint through which a fifth of the world's oil and gas flowed before the US-Israeli war on Iran began on February 28. Transit through the strait has been heavily disrupted due to the conflict, which has seen the United States re-impose a blockade of the chokepoint between Iran and Oman after strikes on ships that Washington blamed on Iran.
The Kirkuk-Baniyas pipeline, which has been mostly out of service since it sustained damage during the 2003 US-led invasion of Iraq, would offer an alternative export route for Iraqi crude, bypassing the strait entirely.
US ambassador to Turkiye Tom Barrack said Iraq's latest oil pipeline agreements would lead to a programme "that will make the Strait of Hormuz an afterthought."
US support and expectations
The United States is supporting efforts by Iraq and Syria to revive the pipeline, which could reduce Iran's ability to block oil supplies through the Strait of Hormuz, a State Department official said on Tuesday. The US expects American companies to play a role in advancing construction of the Kirkuk-Baniyas pipeline.
Bloomberg reported earlier that Chevron could play a role in rebuilding the pipeline. In response to a request for comment, Chevron said, "As a matter of policy, we do not comment on third-party statements or matters of a commercial nature."
Saudi Arabia explores alternative corridor
In a related development, two sources told The Jerusalem Post on July 8 that Saudi Arabia was considering an India-Middle East-Europe Economic Corridor (IMEC) route through Syria, bypassing Israel in the process. The IMEC was announced by former US president Joe Biden in September 2023 as a transformative infrastructure and trade project to link India with Europe through the Persian Gulf and the eastern Mediterranean.
These moves reflect broader efforts by oil producers in the Middle East to lessen their dependence on the Strait of Hormuz and diversify export routes amid ongoing regional tensions.
This article is based on reporting from Al Jazeera and The Jerusalem Post.