Syria signs two memorandums of understanding to revive the Kirkuk-Banias pipeline project

Syria signed two memorandums of understanding to revive the Iraqi-Syrian pipeline project during high-level meetings held in the United States, in the presence of the Iraqi prime minister, the US secretary of energy, and a number of senior officials, in a move that was described  as a remarkable geopolitical and economic shift in the regional supply map.

The signing took place at the American Chamber of Commerce in Washington last night, July 17, as part of an extensive business summit in which government delegations from Damascus and Baghdad participated, with the aim of restarting the historic crude oil pipeline that has been suspended since 2003, and reconnecting Iraqi fields with Syrian export ports on the Mediterranean Sea, in order to strengthen the presence of the two countries in the global energy system.

First note

 It came in the form of a bilateral government agreement between the Syrian Petroleum Company, represented by its CEO Yusuf Qiblawi, and the Iraqi Basra Oil Company, represented by its CEO Bassem Abdul Karim Nasser, to rehabilitate the "Haditha-Baniyas" line linked to the route of the Kirkuk-Baniyas line.

This route aims to restore a strategic corridor for transporting Iraqi oil through the Syrian coast, develop joint infrastructure, and open new horizons for economic integration between the two countries.

Second note

It was signed between the Syrian Petroleum Company and an international consortium led by the United States, including Chevron , UCC Holding, and TI Capital, to start preparing technical, financial and logistical studies for the project, and to develop executive visions for the rehabilitation of the line, pumping and storage stations, in accordance with the approved international standards, in preparation for moving to the field implementation stages.

Economic reports see  the project as the most prominent energy infrastructure project in the region, as the rehabilitation works aim to reach an operational capacity of nearly two million barrels per day of crude oil, which will reactivate one of the most important regional energy transfer corridors and strengthen Syria's position as a hub for the transit of oil towards the Mediterranean.

Billion-dollar package between Washington and Baghdad

The project is supported by the United States because it provides a strategic alternative to the Strait of Hormuz and limits the impact of regional tensions on global supply routes, reducing Tehran's influence in this vital route.

 The signing of the  two memorandums was part of a broader investment package signed by Iraq in the United States, including 50 agreements and memorandums of understanding with a total value of nearly $60 billion, as part of a new path to enhance economic cooperation, develop the energy sector, and attract qualitative investments that support security of supply and drive broader economic development in Washington and Baghdad.

The United States and Iraq have prioritized  the Iraqi-Syrian pipeline revival project as a result of the crisis in the Gulf as the only path capable of bypassing the Strait of Hormuz paralysis and securing the safe and sustainable flow of energy to global markets.

The closure of the Strait of Hormuz was a direct blow to Iraq's economy, as it relies on the strait for more than 85% of its oil exports, and the  confrontations caused Gulf exports to fall by more than 50% and the flow of millions of Iraqi barrels stopped several times, prompting Baghdad to look for alternative land ports that reduce the fragility of its exports.

  The United States saw Iran's control of the strait as a dangerous pressure card that threatened the global economy, so it led urgent efforts to link Basra and Kirkuk oil to the Syrian port of Baniyas across the Mediterranean, to ensure the flow of about two million barrels per day to Europe away from the flaming Gulf.

Extension of the Kirkuk-Ceyhan pipeline  agreement

Turkey and Iraq signed an oil agreement on Thursday (July 9th) to  keep the historic Kirkuk-Ceyhan pipeline operational for an additional 12 months, in an interim protocol aimed at protecting Iraqi exports before the expiration of the basic agreement signed in 1973, which was threatened with a complete closure by July 27,  2026.

The agreement included extensive financial and operational understandings, most notably the agreement of the Turkish company BOTASH to allocate 750,000 barrels per day of the capacity of the Kirkuk-Ceyhan pipeline at Baghdad's request, although the actual pumping does not currently exceed 180,000-200,000 barrels per day.

The agreement stipulated a freeze on legal disputes and international arbitration between the two sides during the protocol period, including Baghdad's claims for $1.5 billion in damages for Kurdistan's previous exports, and Ankara's claims for late transportation fees, to ensure the line's continued uninterrupted operation.

According to Iraqi sources, Turkey has put  forward a broader strategic vision to transform the Kirkuk-Ceyhan line into a mixed-use regional energy corridor, including  a proposal to extend the pipeline south to Basra to raise the total capacity to 2.5 million barrels per day, and allow Kuwait and the Gulf states to export their oil overland through Iraq and Turkey directly to the Mediterranean.