Iraq in talks with Oman to build oil pipeline from Basrah for new export route to Asia

Iraq's state oil marketer SOMO is in talks with OQ Trading of Oman to build a pipeline for crude exports from Iraq's Basrah to an undisclosed location in Oman where weather disruptions can be minimized compared with routes through the Strait of Hormuz.

"Exporting via Oman's open waters ensures more stable shipments and fewer weather-related disruptions compared to Basrah's ports," SOMO General Manager Ali Nazar al-Satari said, according to a Sept. 12 statement carried by official state news agency Iraqi News Agency.

An agreement would also allow Oman to "leverage its strategic location near the Strait of Hormuz, facilitating closer access for Iraqi crude oil exports to Asian customers."

Earlier in September, Oman and Iraq said they would cooperate on marketing and storing Iraqi crude oil, in a move that would look to give Iraq an alternative export route to the Strait of Hormuz.

Iraq is a major oil producer and crude exports average above 3 million b/d each month, while Oman produces just a fraction of that.

Oman's Ras Markaz crude oil terminal sits near the country's major Duqm economic zone and offers alternative storage in the Gulf to the Strait of Hormuz.

With a key pipeline in northern Iraq closed since 2023, nearly all of Iraq's crude is exported through its southern Gulf terminals, where ships must transit the crucial chokepoint at the Strait of Hormuz.

The recent Iran-Israel conflict highlighted the strait's significance as Iran threatened to close the vital waterway that some 20% of the globe's energy trade flows through. The threat has spurred Iraq to seek alternative export paths, and the country has held talks to possibly revive pipelines that would dump into ports in Syria and Turkey.

Iraq and Oman signed multiple agreements and MOUs during a recent visit of Iraqi delegation led by Iraqi Prime Minister Mohammed al-Sudani to Oman. The MOUs included the ability of Iraq to use Oman storage facilities for Iraqi crude and for both sides to collaborate in marketing it, according to the INA statement.