Steps to rebuild economic relations between Iraq and Syria are accelerating, with Syrian territory becoming an effective route for Iraqi energy exports to the Mediterranean.
The volume of Iraqi fuel oil transported through Syria reached about 21.4 million barrels between March and the end of August, alongside efforts to expand cooperation to include the future transport of crude oil and develop a pipeline linking Iraq to the port of Baniyas.
According to data from the Washington-based Energy Research Unit, Iraqi fuel oil exports via the Syrian route rose from 254,000 barrels in March to 686,000 in April. Then they jumped to 3.86 million barrels in May, followed by five million in June and 5.65 million in July, reaching about 5.91 million barrels during August.
The quantities are transported by tanker trucks through land crossings between the two countries, particularly the Al-Waleed-Tanf and Rabia-Yarubiyah crossings. They travel through Syria's road network to storage tanks at the port of Baniyas on the Mediterranean, where they are loaded onto tankers for re-export to foreign markets.
The expansion of fuel oil traffic through Syrian territory gives a new economic dimension to relations between the two countries.
Syria began receiving convoys of Iraqi tankers heading to Baniyas in April, amid disruptions to shipping traffic in the Strait of Hormuz and Baghdad's efforts to find additional outlets for its exports.
Expanding export routes
Iraqi Oil Minister Basim Mohammed Khudair said on Saturday that "Iraq is working to build a more flexible export system by diversifying outlets and not concentrating most oil exports through a single route".
In an interview, Khudair explained that the move towards Syria and the port of Baniyas is part of this strategy, alongside existing outlets and other projects being developed by the ministry.
He said that Iraq's export capacity had exceeded 3 million barrels per day, and that the ministry aims to raise this to 5 million barrels per day after completing strategic infrastructure and export pipeline projects, including the route extending towards Baniyas on the Mediterranean.
He added that the importance of this route was not limited to adding new export capacity and would provide an alternative outlet that could be used when disruptions affect traditional export routes.
Khudair further stressed that diversifying outlets had become a key part of Iraq's policy to ensure the continued flow of oil to global markets and reduce risks that could affect exports.
As part of efforts to expand export outlets and increase volumes transported through Syrian territory, Ali Nizar Al-Shatri, director-general of the Iraqi Oil Marketing Company (SOMO), confirmed that talks are under way with the Syrian Petroleum Company to conclude an agreement allowing Basra crude to be transported by tanker trucks to the port of Baniyas.
Al-Shatri told local media that Iraq does not yet have contracts to export crude oil through Syria.
However, the anticipated agreement would allow quantities of Basra crude to be transported from the Zubair 1 and Zubair 2 facilities to Baniyas storage tanks.
The tanks' currently available capacity ranges between 1.5 million and 2 million barrels, in preparation for loading the crude onto tankers and selling it in foreign markets.
He said quantities would be limited during the first phase because Baniyas storage tanks require maintenance.
Road transport would serve as a secondary route to increase export flexibility until the completion of the pipeline project between the two countries.
Viability of the Syrian route
Oil expert Kovan Sherwani said using Syrian territory and the port of Baniyas provides Iraq with an important option for diversifying its export routes and reducing risks resulting from heavy reliance on southern outlets and the Strait of Hormuz.
He said the experience of transporting fuel oil had demonstrated that the route could operate in practice.
Sherwani told The New Arab that "transporting Iraqi crude oil by tanker trucks overland through Syrian territory provides a quick and flexible solution in emergencies, but it is more expensive and has less capacity than pipelines, so it cannot permanently replace the maritime export system".
He added that "the strategic importance of the Syrian route will increase significantly with the operation of a pipeline to Baniyas, giving Iraq direct access to the Mediterranean and increasing its ability to deal with geopolitical crises and disruptions to shipping routes".
Sherwani said the long-term success of this option would remain linked to the storage and loading capacity of facilities in Baniyas.
It would also depend on the efficiency of Syria's transport network, as well as insurance and security costs and stability along the route.
Economic gains
Economic expert Karim Al-Hilo said the Syrian route could go beyond its role in oil to become a basis for expanding economic interests between the two countries.
Syria would benefit from transport, storage, ports, logistics services and transit fees, while Iraq would gain an additional outlet towards the Mediterranean and European markets.
Al-Hilo told The New Arab that growing transit traffic could open the way for expanding trade and investments linked to transport, energy and infrastructure.
This could extend to agriculture, food industries, pharmaceuticals, construction materials and reconstruction.
He said transforming the route from a solution imposed by regional circumstances into a long-term economic partnership would require developing border crossings, transport and storage networks.
It would also require facilitating payments and the movement of companies and traders, allowing for the creation of a sustainable economic corridor linking Iraq with the Syrian coast and foreign markets.
Al-Hilo noted that the economic impact could emerge if energy cooperation becomes an entry point for rebuilding supply chains.
Transport would then not be limited to oil exports, but the same trucks and logistics infrastructure could also benefit from increased movement of goods and investment.
This could reduce transport costs, increase the viability of border crossings and expand economic interests.
Article translated from Arabic by Afrah Almatwari. To read the original, click here.