Iraq’s cabinet has approved a project to pump crude oil to the Mediterranean via Syria, authorising the chief executive of the state-owned Basra Oil Company to sign a memorandum of understanding with Syria’s energy ministry. The decision, announced on Saturday, aims to diversify export routes and reduce Baghdad’s reliance on the Strait of Hormuz, though the government did not disclose the pipeline’s capacity, construction timeline or financing.

Iraqi Oil Minister Bassem Mohammed Khudair convened a crisis cell meeting this week, stressing the need to accelerate strategic projects and find alternatives for crude exports. Southern ports remain paralysed by the ongoing Hormuz crisis, which began after a US-Israeli military operation against Iran in February 2026 effectively blockaded the waterway. Baghdad previously declared force majeure on fields operated by foreign companies as exports collapsed, threatening an economy where oil revenues account for up to 95 per cent of the state budget.

The pipeline forms part of a wider regional push to build export corridors that circumvent the Strait. Goldman Sachs estimates that by end-2028, existing and new bypass routes could carry roughly 60 per cent of the oil that previously transited Hormuz. Saudi Arabia is expanding its east-west pipeline to the Red Sea to reach 9 million barrels per day, while the UAE plans to double capacity from its Fujairah terminal to 3.6 million bpd. For Iraq, the Syrian route would complement efforts to rehabilitate the dormant Kirkuk-Ceyhan pipeline to Turkey and advance a separate link to Jordan’s Red Sea port of Aqaba.

Viewed from Washington, the initiative aligns with discussions held in July between US envoy Tom Barak and Syrian and Iraqi officials on oil supplies bypassing Hormuz. Barak said the projects aim to make the strait “secondary”. Syria stands to gain transit fees and infrastructure investment, while Iraq also approved talks with a consortium of ConocoPhillips, TI Capital and Novaterra to develop the Akkas gas field in western Anbar province. The next step is the formal signing of the bilateral memorandum, after which technical and financial details are expected to be negotiated.