Report: Iraq Begins Exporting Oil via Syria

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Iraq has opened a land export route, bypassing the Hormuz Strait blockade caused by the Iran conflict, transporting a large amount of fuel oil via Syria to export terminals. This adjustment reflects the profound impact of changing Middle Eastern geopolitics on the regional energy supply chain.

According to Reuters, Iraq's national oil sales agency (SOMO) has signed contracts to export approximately 650,000 tons of fuel oil monthly via Syrian land routes from April to June.

The Iraqi Oil Ministry announced on Wednesday that this move aims to support the national economy, increase fiscal revenue, and stated that transportation volumes will gradually rise to expand export capacity.

The Syrian Oil Company confirmed that the first batch of Iraqi fuel oil cargo has already arrived at the Banias refinery storage tanks via the Al-Tanf border crossing, and unloading operations are progressing as planned. Meanwhile, Iraq has also resumed crude oil exports via Turkey’s Ceyhan port, pushing multiple export routes in parallel.

Conflict and Blockade Force Route Switch

In February this year, U.S. and Israel air strikes on Iran led to the closure of the Hormuz Strait.

According to Reuters sources, although this land route has not been used for decades, the end of the Syrian civil war and maritime disruption caused by regional conflicts have made it the most feasible alternative option for now, despite higher transportation costs.

Before the outbreak, Iraq mainly exported fuel oil through the southern Arabian Gulf's Khor Al-Zubair port, reaching global markets via sea routes. The Hormuz Strait blockade cut off this traditional channel, forcing Iraqi oil enterprises to seek alternative export solutions.

Iraqi energy officials said the country’s largest southern oilfields have seen production drop by nearly 80%, down to about 800,000 barrels per day. Saturation of storage tanks and transport difficulties have led Iraq and other oil-producing countries to cut output one after another.

Rapid Expansion of the Land Route

Adnan al-Kubaisi, a member of the Anbar Provincial Council, revealed Tuesday that more than 60 Iraqi oil tankers have started entering Syria via the Al-Walid border crossing, which has reopened after being closed for over ten years.

He expects the number of crossing oil tankers to rise to 600-700 in the future.

Al-Walid subdistrict leader Mujahid Mardhi Al-Dulaimi said that currently, more than 150 tankers are waiting to enter Syria, and daily crossings are expected to reach about 500 vehicles.

The Syrian Oil Company stated that this transportation is part of an "integrated supply plan." After arrival, the cargo will be transferred to professional oil tankers at Banias port for onward delivery, and said infrastructure and operations teams are working efficiently.

Contract Details and Discount Structure

According to Reuters, SOMO awarded long-term contracts to four Iraqi oil suppliers, with the contracts signed against the backdrop of February's Iran conflict and the subsequent export disruption.

Two traders will export a combined 720,000 tons of fuel oil from Iraq's northern, central, and southern refineries over three months, with discounts of $160-170 per ton; a third trader will export 401,000 tons with a discount of about $160 per ton; and a fourth received a smaller contract of 90,000 tons with a discount of about $155 per ton.

The substantial discounts reflect the higher cost of land transport, as well as Iraq’s urgency to clear inventory due to constrained export routes.

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