Before the U.S.-Iran war began on February 28, Iraq exported nearly 3.5 million barrels per day through Hormuz. Then the strait closed. Storage at key fields filled, and Iraq cut production to roughly a third of its normal output of more than 4 million barrels a day. Exports from its main southern fields dropped 70% during the conflict.

Iraq is OPEC’s second-largest producer, with proven reserves of 145 billion barrels. It is also, in practical terms, landlocked when Hormuz closes. Saudi Arabia has the East-West pipeline to the Red Sea, moving 5 to 7 million barrels a day. The UAE has Habshan-Fujairah to the Gulf of Oman. Iraq has almost nothing.

That is not an inconvenience. Oil is Iraq’s government. Without an export route, there is no revenue, no budget, no state.

The routes on the table

Three options are live, none of them easy.

The Kirkuk-Baniyas line to Syria’s Mediterranean coast runs roughly 800 kilometers and has been mostly out of service since it was damaged during the 2003 invasion. The Syrian port of Baniyas, home to the country’s largest refinery, has emerged as the front-runner to receive Iraqi crude. Chevron, TotalEnergies, Los Angeles-based TI Capital, and Qatar’s UCC Holding have all been part of those discussions. A State Department official said Tuesday that Washington supports the effort and expects American companies to help build it.

The Basra-Aqaba line to Jordan would carry up to 2.25 million barrels a day at an estimated cost of $18 billion. Iraq and Jordan signed an agreement to build it in 2013, due for completion in 2017, delayed in 2014. Jordanian Foreign Minister Ayman Safadi and Al Zaidi discussed moving it forward on Wednesday.

The Iraq-Turkey line already exists — roughly 600 miles, with total capacity near 1.6 million barrels a day. It had been closed and is reopening because of the Hormuz disruption, reportedly at an initial 250,000 barrels a day.

The risk nobody is pricing

The probable pipeline routes run through Iraq’s western Anbar province and eastern Syria, where ISIS cells remain active. Any company writing a check is also betting that Syria’s fledgling government can hold the ground for the decades a pipeline takes to pay back. Rebuilding Kirkuk-Baniyas alone could cost billions.

TotalEnergies chief executive Patrick Pouyanne put the strategic logic plainly: if you want to move Iraqi oil without depending on Hormuz, Syria becomes an important transit route.

The fields

West Qurna-2 holds roughly 14 billion barrels of recoverable reserves and was producing about 460,000 barrels a day — nearly 10% of Iraq’s output and half a percent of global supply — before the cuts. Russia’s Lukoil developed it under a service contract dating to 2009 and declared force majeure after U.S. and U.K. sanctions in October 2025. Basra Oil Company took temporary transfer of the contract, and in February signed a framework deal giving Chevron exclusive negotiating rights for one year. North Oil Company holds 25% of the project. Chevron could nearly double output to between 750,000 and 800,000 barrels a day if it takes over as operator.

Nasiriyah came in the same February round, alongside four exploration blocks in Dhi Qar province and the Balad field in Salaheddin. On July 1, Basra Oil signed a non-disclosure agreement with Chevron to govern data exchange for evaluating West Qurna-2, overseen by Oil Minister Bassim Khudair.

The politics

Al Zaidi, who took office in May, has said American companies will get first refusal on Iraqi energy and investment deals, and has directed the oil, electricity, and communications ministries accordingly. He has outlined a joint energy and development fund with Washington financed by the equivalent of 500,000 barrels a day.

He met President Trump at the White House on July 14. “We’re going to create a lot of jobs for both countries,” Trump said. Al Zaidi also met Tom Barrack, the special presidential envoy for Iraq.

What it means

Brent traded below $85 Thursday; West Texas Intermediate held just under $80. Every barrel that finds a route around Hormuz takes a small piece out of the war premium sitting in those prices — and in American gasoline, diesel, and airline fuel costs.

The catch is time. Pipelines take years. The war is now.

JBizNews Desk | Houston

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