Iraq is close to trucking its first crude through Syria, three months later than planned

Iraq is close to sending its first crude by truck through Syria, giving Baghdad an overland export route that avoids Hormuz. The agreement between the two governments is almost done, and Syrian Petroleum Company (SPC) CEO Youssef Qiblawy told Bloomberg last week that he hopes the first trucks will arrive by mid-October.

That would put the route about three months behind schedule: Iraqi officials had expected tanker-truck shipments to start in early July, at around 50k bbl / d, once new unloading areas opened at Baniyas. In early September, Somo was still negotiating with the SPCand had no crude contracts through Syria, Attaqa reported.

Iraqi fuel oil is already making the trip, and it gives a sense of the scale crude would need. More than 600k tons of Iraqi fuel oil reached Syria by road in June, and a total of 2.1 mn tonnes since April, the National reported. Around 1k trucks carry it, each hauling roughly 220 barrels, and crude would need “at least the same number,” Qiblawy said. That is roughly 220k bbl / d, a small share of Iraq’s roughly 2.7 mn bbl / d of crude exports last month.

Where the corridor breaks

Baniyas works as a transfer point: Iraqi fuel oil is unloaded from trucks at a platform connected to storage tanks north of the Baniyas refinery, then pumped onto tankers offshore for export. The cargo never goes through the refinery, so the port links Iraq’s trucking network directly to international shipping.

How much the port can store, and how fast trucks can unload, will decide how much crude gets through .Baniyas storage holds 1.5 to 2 mn barrels in old tanks that need maintenance, which by our math is seven to nine days of crude at 220k bbl / d. Queues of tanker trucks have stretched more than 30 km outside Baniyas, and border processing and truck turnaround times limit how fast cargo moves. Syrian Petroleum Co. plans to add storage for Iraqi crude, and the two countries agreed in September to link their customs systems digitally.

Iraq’s trucking route to Kirkuk shows how hard the ramp-up can be: Basra Oil Company’s first two-day pilot trucking crude to Kirkuk moved about 19k bbl / d, barely a fifth of its 100k-150k bbl / d target, held back by truck availability and loading capacity.

The bigger volumes depend on a 2 mn bbl / d pipeline

Construction of a new Iraq-Syria oil pipeline could begin in 1Q 2027, Reuters reported. The project is currently in preliminary engineering design, while preparations continue at Baniyas to receive Iraqi crude. Iraq’s Oil Ministry has agreed with a Chevron-led consortium on a USD 15 bn pipeline of up to 2 mn bbl / d. A Basra-Baniyas pipeline would take about four years to build after a final investment decision, with Chevron, UCC Holding, and TI Capital planning to lead.