Iraq expands crude and naphtha exports through Syria

Iraq will expand crude and naphtha exports through Syria. Officials expect two new unloading areas and related infrastructure at Baniyas to come online within a week. Iraqi officials said crude exports could begin at some 50k bbl / d once loading installations are completed, with tanker-truck shipments expected to start in early July. Baniyas currently handles an average of 900 tanker trucks per day, according to Syrian officials.

The country needs it: “Iraq will be the last of the major Gulf exporters to recover, given reservoir maturity and operational complexity,” Alan Gelder, SVP refining, chemicals, and oil markets at Wood Mackenzie, tells EnterpriseAM.

The planned crude volumes underline the corridor’s role as an export backstop rather than a substitute for Iraq’s southern terminals. Iraq was shipping around 3.4 mn bbl / d through Basra before the war, meaning the initial 50k bbl / d Syria route would equal roughly 1.5% of those pre-war southern flows — based on our calculations.

Diversifying export corridors through Syria forms part of a government-approved strategy to reduce reliance on a single outlet. The move builds on an arrangement that has seen Iraqi fuel oil trucked across Syria and re-exported through the Mediterranean port of Baniyas after the closure of Hormuz.

The Baniyas operation is a road-to-tanker transshipment chain. Iraqi fuel oil is not being processed at the Baniyas refinery, but trucks unload at a marine platform linked to storage tanks north of the refinery, before being pumped directly onto export tankers offshore.

The route works, but it is far from elegant: Iraqi fuel oil has already reached buyers across Africa and Europe, with one recent cargo arriving at Alexandria earlier this month. Yet the corridor runs through war-damaged infrastructure, with tanker queues stretching more than 30 km outside Baniyas. Accidents and protests have also exposed the operational risks of relying on highways instead of pipelines, highlighting why Syria continues to push for the revival of the Iraq-Syria pipeline.

A revived Iraq-Syria pipeline would change the economics and scale of the route. The line would carry up to 300k bbl / d, six times the initial crude volumes planned to be transported through Baniyas by truck.