Iraq and Syria Sign Deal to Rebuild Kirkuk-Baniyas Pipeline as Hormuz Alternative
Iraq and Syria signed a cooperation agreement on July 17 to rehabilitate and reconstruct the Kirkuk-Baniyas crude oil pipeline, a Mediterranean export route that has sat dormant for decades. The signing took place in Washington on the sidelines of a US-Iraq business summit, during Iraqi Prime Minister Ali al-Zaidi’s visit to the United States, which also included a stop in Houston for meetings with major energy firms.
Basra Oil Company CEO Bassam Abdul Karim Nasr signed on behalf of Iraq, and Syrian Petroleum Company CEO Yousef Kabali signed for Syria. US Energy Secretary Chris Wright attended the ceremony, and the State Department framed the pipeline as a strategic infrastructure project to be executed by a US-led international consortium.
Why the pipeline matters now
The Kirkuk-Baniyas line dates to 1952, when it carried around 300,000 barrels per day from Iraq’s northern oil fields to Syria’s Mediterranean coast at Baniyas. Baghdad shut the pipeline in the 1980s after Damascus sided with Iran during the Iran-Iraq war, and the infrastructure was further damaged following the 2003 US invasion of Iraq. It has been effectively defunct ever since.
Reviving it has been discussed intermittently for two decades, including a 2010 agreement between Damascus and Baghdad to build two new parallel lines that never materialized. The current push has real momentum behind it: Chevron, Los Angeles-based TI Capital, and Syrian-Qatari investors have already formed a consortium to carry out the reconstruction, which is expected to give the line an initial transport capacity of 2 million barrels per day, more than six times its original capacity.
The urgency traces directly to the Strait of Hormuz. Roughly a fifth of global petroleum trade transits the strait, and Iraq depends heavily on southern export terminals near it. With transit through Hormuz disrupted by the ongoing US-Israel war against Iran, Baghdad has been exposed to acute supply risk with no real alternative route to market. Iraq has already started moving limited volumes of crude overland through Syria by tanker truck, though at only 10,000-15,000 barrels per day, a fraction of what a rebuilt pipeline would carry.
The reconstruction challenge
Rebuilding a seven-decade-old pipeline that has been fought over, sanctioned, and left idle for the better part of 40 years is not a quick fix. Syrian Petroleum Company officials have said the line will likely need wholesale replacement rather than repair, including new storage tanks, pumps, and electrical systems, damage compounded by more recent missile strikes on pumping stations. Regional officials estimate a two-to-three-year construction timeline if work proceeds simultaneously from both the Iraqi and Syrian ends.
That timeline matters for how seriously the market should treat this as a near-term Hormuz hedge. It isn’t one. Even in the most optimistic case, Iraq is looking at years before Kirkuk-Baniyas offers meaningful export volume, which means the country’s exposure to a blocked or contested strait remains effectively unchanged for the duration of any current conflict.
Part of a broader pattern
The Iraq-Syria pipeline fits alongside Saudi Arabia’s East-West pipeline as another entry in the growing list of physical bypass routes regional producers are racing to build around the Strait of Hormuz. Unlike the Saudi line, which was built specifically as a Hormuz hedge and has operated for decades, the Kirkuk-Baniyas project has to be built from a standing start, on contested and previously war-damaged territory, coordinated between two governments with a broken history on this exact project.
The agreement also reflects a wider recalibration underway in Baghdad. Iraqi officials signed dozens of preliminary deals with Western firms during the same Washington visit, reportedly worth more than $60 billion across energy, healthcare, and technology, part of an evident push to deepen ties with Washington and reduce reliance on infrastructure and export routes that run through Iranian-contested waters.