Key facts
- Iraq plans to build a new crude oil pipeline through Syria to export oil, bypassing the Strait of Hormuz.
- The project is estimated to take four years to complete and cost at least $15 billion.
- A consortium including Chevron, TI Capital, and UCC Holding is conducting feasibility studies.
- The existing pipeline infrastructure is too damaged and incompatible with new specifications.
- The U.S. anticipates an initial transport capacity of 2 million barrels per day for the new pipeline.
Iraq's ambitious plan to export crude oil via a new pipeline through Syria, designed to circumvent potential disruptions in the Strait of Hormuz, is likely four years away from completion and will require an investment of at least $15 billion, according to sources familiar with the project.
U.S. officials and energy executives are promoting the initiative, which has garnered initial support for feasibility studies from a consortium including Chevron, as a strategic move to reduce the oil industry's dependence on the vital waterway, which has faced significant disruptions due to the ongoing conflict involving Iran. U.S. Treasury Secretary Scott Bessent stated that the Strait of Hormuz would become "irrelevant" within two years, with a substantial portion of exports rerouted through underground pipelines.
However, sources directly involved in the pipeline project indicated that the timeline could be longer than anticipated due to the necessity of constructing entirely new infrastructure, rather than rehabilitating the existing war-damaged pipeline that has been largely out of use since the 1980s. The existing Kirkuk-Banias route, while partially usable, is not compatible with modern specifications. The proposed integrated system would connect Iraq's northern and southern oil fields to a central hub in Haditha before extending to Banias.
The U.S. has expressed support for the project, anticipating an initial transport capacity of 2 million barrels per day, a significant increase from the old pipeline's capacity. Iraq has also resumed oil exports through a pipeline to Turkey's Ceyhan port. The sources noted that clearing old infrastructure and securing land rights in Syria could further impact the timeline.
Syria and Iraq have signed memorandums of understanding with Chevron, TI Capital, and UCC Holding for technical and financial studies. Chevron has acknowledged the project's potential as an "access route to market" and is in negotiations to enter Iraq's southern fields, but emphasized that technical studies are still needed to determine the extent of rebuilding required.