Iraq expects to start transporting crude oil by lorry to Syria from mid-October

Iraq anticipates initiating the transportation of crude oil via lorries to Syria from mid-October, a move set to enhance its energy exports which have faced challenges due to the Strait of Hormuz conflict in Iran. The crude will be dispatched to the Mediterranean Sea via lorries following Iraq's request for Syrian authorities' support.

According to Bloomberg, citing Yousef Qiblawy, CEO of the Syrian state-owned Petroleum, the agreement between Iraq and Syria is nearly finalized. Iraqi oil exports are anticipated to commence promptly, potentially by mid-October, with the initial shipment of trucks loaded with crude arriving in Syria, as Qiblawy reported. This development follows a similar collaboration in late September, where Iraq started importing petrol through Syria.

In April, Syria became Iraq's primary conduit for fuel oil exports, partially compensating for the disruption caused by the Iran war. Since then, over 2.1 million tonnes of Iraqi fuel oil have been transported to Syria's Baniyas port. An Iraqi Oil Ministry official disclosed to The National that the first batch of imported petrol, totaling 32,000 tonnes, will be unloaded at the Baniyas refinery and subsequently transported to Iraq by lorries.

The ongoing conflicts since February have plunged Iraq into its most severe economic and security predicament. As Opec's second-largest producer, Iraq relies heavily on oil, accounting for at least 90% of its revenue. Previously, the majority of its exports, approximately 3.3 million barrels daily before the war, traversed the Strait of Hormuz from its southern Basra terminals.

The Iraq-Syria accord signifies a substantial strengthening of bilateral ties amid Iraq's trade disruptions through the Hormuz Strait and the US's push for closer relations between the two nations. The Hormuz Strait, previously handling about a fifth of global energy exports prior to the war, remains a contentious issue in the ongoing eight-month conflict.

Iraq is a significant crude oil producer but contends with petrol shortages due to refinery issues and energy infrastructure management problems. Recently, on Sunday, the state-owned Iraqi Oil Tankers Company successfully transported two million barrels of its own crude beyond the Strait of Hormuz for the first time in decades, aiming to shift part of Iraq's oil exports from the conventional free-on-board Basra port model to transit through the strait.