Key facts
- UCC Holding is trucking 120,000 to 150,000 barrels per day of Iraqi crude to Baniyas, per Basra Oil Company's Bassem Abdul Karim.
- UCC plans to load 5 million to 14 million barrels over three months from October 14 at a $38 per barrel discount, a document reviewed by Reuters showed.
- UCC is entitled to about $12 per barrel to cover trucking and related transport costs through Syria under the deal.
- UCC has a fleet of 6,000 trucks it is expanding to 10,000, with around 10,000 drivers, a person familiar with the deal said.
- Tuba storage facility manager Luay Jawad said about 1.6 million barrels had been loaded since the deal took effect on October 26.
- Iraq produced nearly 4.5 million barrels per day in October, about 500,000 more than a month earlier, per OPEC-cited secondary sources.
Iraq has turned to an overland trucking route through the Syrian desert to move crude to the Mediterranean port of Baniyas, after the Strait of Hormuz, its usual outlet, was disrupted by the Iran war. Hundreds of tanker trucks were queuing outside a depot near Basra to load Iraqi crude bound for Baniyas, a route Reuters reported had been largely unused for decades.
Qatari energy group UCC Holding has been shipping Iraqi crude by truck to Baniyas since last month under a contract with state oil marketer SOMO, said Bassem Abdul Karim, director general of state-run Basra Oil Company. UCC began shipping 120,000 to 150,000 barrels per day, with volumes depending on truck availability, he said. UCC and SOMO did not respond to requests for comment.
The crude is trucked from Iraq's southern oilfields to Baniyas for export to international markets, Abdul Karim said. A person familiar with the deal said UCC already has a fleet of 6,000 trucks that it is expanding to 10,000 for the route, and around 10,000 drivers, with about 150,000 barrels unloaded per day.
"We load crude oil at the Tuba storage facility and transport it to Baniyas, Syria. The round trip, including the return journey to Tuba, takes up to five days," said Ishaq Mohammed, one of the tanker drivers.
Luay Jawad, manager of the Tuba storage facility near Basra, said that since the deal took effect on October 26, UCC had loaded about 1.6 million barrels. A document reviewed by Reuters showed UCC plans to load between 5 million and 14 million barrels of heavy crude over three months from October 14 at a discount of $38 per barrel. The person familiar with the situation said volumes are unlikely to rise above that level in the near future because of bottlenecks in truck supply and other constraints.
The oil is loaded onto ships at Baniyas for delivery to Mediterranean refineries in Greece, Italy and Turkey, among others, the person said. UCC is entitled to about $12 per barrel to cover trucking and related transportation costs through Syria under the deal.
Iraq produced nearly 4.5 million barrels per day in October, about half a million barrels more than a month earlier, according to secondary sources cited by OPEC in its latest monthly report. The overland route has regained appeal despite higher transportation costs because of an end to years of conflict in Syria, two people close to the matter told Reuters.