Iraq postpones Basra-Aqaba oil pipeline project over 'threats' from Iran-backed factions

Iraqi Prime Minister Mohammed Shia' al-Sudani has postponed launching the Basra-Aqaba oil pipeline project due to "threats from Iran-backed Shia militias" in Iraq, sources told The New Arab Arabic language sister site Al-Araby Al-Jadeed.

"The Basra-Aqaba oil pipeline has been postponed due to political and security factors," an official in Iraq’s oil ministry told Al-Araby Al-Jadeed on condition of anonymity.

"Sudani’s cabinet has told Jordan that it is conducting a new assessment of the project because of legal and technical issues, in addition to the lack of cash to implement the project."

The official also said that threats made by armed factions about targeting the project, as well as pressure from politicians including former PM Nouri al-Maliki and Asaib Ahl Al-Haq head Qais Khazali, have forced Baghdad to abandon the project.

Iraqi politician Sheikh Ali Al-Asadi, @Ali_1AlAsadi The head of Al-Nujaba Political Council threatens Jordanian and its allies from the Shi’a Bloc that would not allow Basra-Aqaba oil pipeline project. pic.twitter.com/uDmQBwzAq3

— Iraqi Qahwa كهوة عراقية (@IraqiQahwa) January 27, 2023

Khazali had previously condemned the project, claiming the pipeline would feed Israel.

The proposed pipeline, almost 2,000 kilometres long, would start at the southern Iraqi city of Basra and transport one million barrels per day (bpd) to the Jordanian port of Aqaba.

The pipeline would provide about 150,000 bpd of crude to Jordan, with the rest of the oil to be exported to Egypt and the global market.

The idea for the project first emerged in the 1980s, when Iraq began exploring alternative routes to export its oil during the 1980-88 Iran-Iraq War. The pipeline was intended to bypass the Strait of Hormuz.

However, the project has been stalled for decades due to security and political concerns.

The pipeline project is estimated to cost between US$7-9 billion. An official from the office of PM Sudani told Al-Araby Al-Jadeed on condition of anonymity that no financial allocations were made for the project in Iraq’s federal budget bill for 2023 and the two successive years.

The New Arab contacted Asim Jihad, spokesperson of the Iraqi oil ministry, but he was unavailable for comment. 

Iraq's parliament is dominated by the Coordination Framework - an alliance of powerful pro-Iran Shia factions from whose ranks the current prime minister emerged.

Al-Maliki, who was the Iraqi PM from 2006 until 2014, revived the project in 2013. However, it was not implemented again due to the rise of the Islamic State group (IS) that controlled a third of Iraq’s territories in 2014.

Subsequent Iraqi governments led by Haidar al-Abadi (2014-18) and Adil Abdul Mahdi (2018-20) also tried to implement the project, but both were unsuccessful, mainly because of economic crises and political pressures.

Former PM Mustafa al-Kadhimi in 2020 tried to push for the project to be realised in cooperation with Jordan and Egypt, but threats by pro-Iran militias foiled his efforts.

"Iraq has thought to carry out the Basra-Aqaba pipeline for decades, but continuous wars and internal conflicts foiled all opportunities to make it a reality," Bahrooz Jaafar, a Kurdish international political economy expert told The New Arab.

"To answer why this project has many enemies, it is because the project is considered to be somewhat contrary to Iranian policy, because shifting the direction of the oil pipeline from the Gulf to the Mediterranean has multiple connotations, including bolstering the oil market towards the West via Israel."