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Iraq approves strategic oil export pipeline study agreement, seeking to bypass the Strait of Hormuz

Iraq approves strategic oil export pipeline study agreement, seeking to bypass the Strait of Hormuz

汇通财经汇通财经2026/07/05 23:11
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1. The Iraqi cabinet has approved Basra Oil Company to sign an "Agreement Framework" and a confidentiality agreement with a consortium consisting of US Capital TI, Chevron, and Qatar's UCC Energy to study a strategic oil export pipeline project. This move aims to open up an alternative route for Iraqi crude oil exports that bypasses the Strait of Hormuz.2. The consortium will prepare technical and financial feasibility study reports, comparing two proposed routes: one is the "Basra-Haditha-Kirkuk-Ceyhan" line, leading to Turkey's Mediterranean export terminal; the other is the "Basra-Haditha-Baniyas" line, ending at Syria's Mediterranean port. Both routes start from Basra in southern Iraq and diverge northwards after passing through the western Haditha region.3. The cabinet made it clear that these agreements will not impose any final financial or contractual obligations on the Iraqi Ministry of Oil. In addition, the cabinet has authorized Basra Oil Company to sign a consultancy services contract with US firm KBR for the "Basra-Haditha" oil pipeline project.4. Currently, most of Iraq's crude oil exports rely on the Strait of Hormuz. As OPEC's second-largest oil producer, Iraq is expected to export an average of about 3.3 million barrels of oil per day in 2025, with the vast majority transported through this strait. Establishing alternative export routes will significantly reduce the risk premium embedded in Brent crude prices due to geopolitical risks.5. This approval comes as the Iraqi Prime Minister plans to visit Washington in July, with Baghdad seeking to expand US energy investment in Iraq. The feasibility study is expected to take several months to complete, and the timetable for a final investment decision has not yet been disclosed.
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