The United States supports plans by Iraq and Syria to rebuild a damaged oil pipeline that would carry crude from Kirkuk to Syria’s Mediterranean coast and bypass the Strait of Hormuz.
The U.S. backs the Iraqi and Syrian efforts to rebuild the Kirkuk-Baniyas oil pipeline and diminish Iran’s potential to disrupt Hormuz traffic in the future, an official at the U.S. State Department told Reuters.
The United States also expects U.S. companies to play a role in the reconstruction of the Kirkuk-Baniyas oil route, according to reports. The pipeline would be crucial for Iraq’s oil exports not depending on Hormuz, Syria’s post-war economy, and reduced Iranian leverage in the Strait.
The plan is one of several that Iraq and Syria have been studying in recent weeks and discussing with top U.S officials.
Thomas Barrack, the Special Presidential Envoy for Syria and Iraq, has hosted talks with Syrian and Iraqi officials and oil companies, including U.S. supermajor Chevron, on potentially rebuilding the damaged Kirkuk-Baniyas oil pipeline, sources with knowledge of the matter told Bloomberg this week.
Other options for brand-new land oil corridors between Iraq and Syria are also being considered, although talks have so far focused on the Kirkuk-Baniyas link.
One of the alternatives would be an oil pipeline from Basrah in southern Iraq to Haditha in the north, which could then branch out to Syria, Turkey, or Jordan, according to Bloomberg’s sources.
Early this month, Iraq’s government approved the state Basra Oil Company to sign a preliminary agreement with U.S. firms including Chevron to study potential oil pipeline projects.
Iraq desperately needs export routes not depending on the Strait of Hormuz, whose closure exposed this key Iraqi vulnerability, forced OPEC’s second-largest producer to slash upstream production, and led to billions of U.S. dollars of lost revenues for Baghdad.
The U.S. support for Iraq-Syria oil routes comes as U.S. President Donald Trump hosted Iraqi Prime Minister Ali al-Zaidi at the White House on Tuesday.
“New pipelines for energy, new roads to progress. A more prosperous Iraq means a more stable region—and exclusive opportunities for American business,” Barrack, the presidential envoy, said, commenting on the meeting.
The Strait of Hormuz crisis has prompted all Persian Gulf producers to seek alternative export routes via pipelines to lessen their dependence on the chokepoint that will never be the same again.
By Tsvetana Paraskova for Oilprice.com
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