The U.S. State Department confirmed on Tuesday, July 14, that Washington is backing an effort by Iraq and Syria to rebuild a crude oil pipeline across their border — a project designed to move Iraqi oil to the Mediterranean without ever touching the Strait of Hormuz. A State Department official said the United States is supporting the reconstruction of the line between the two countries, A News and the official added that American companies are expected to take part in building it.
The man driving it is Thomas Barrack, President Donald Trump’s special envoy for Syria and Iraq and ambassador to Turkey. Barrack has been convening talks with officials from both governments and with companies including Chevron Corp. about restarting a pipeline running from Iraq to Syria’s western coast. Several routes are on the table, but the discussions center on the Kirkuk-to-Baniyas line, shut for more than two decades. Bloomberg
The announcement landed the same day Trump hosted Iraqi Prime Minister Ali al-Zaidi in the Oval Office — al-Zaidi’s first trip to Washington since taking office. Trump told reporters that “massive” new oil deals with Iraq would be announced soon, saying the country has tremendous potential and that American companies would be pulling a lot of oil out of the ground. Bloomberg He said Energy Secretary Chris Wright would roll out a series of oil partnerships within days. Washington Times
The pipeline itself
The Kirkuk-Baniyas line is old. It was built in 1952, carried roughly 300,000 barrels per day, and was shut down in 1982 amid a political rupture between the Iraqi and Syrian Ba’ath parties. It reopened briefly in 2000, then was badly damaged during the 2003 invasion and has been dead ever since. Global Energy Monitor
Rebuilding it is not a patch job. The route needs its pumps and electrical systems wholesale replaced, and officials estimate the work will take two to three years. Pipeline-journal Iraq’s cabinet approved preliminary agreements on July 5 clearing a U.S.-Qatari consortium — TI Capital, Chevron, and Qatar’s UCC — to study the export routes. Cost estimates for the 800-to-880 kilometer line run between $4.5 billion and $8 billion. Crypto Briefing Al-Zaidi is expected to sign the deal with the American firms and the Qatari builder covering links to ports in both Turkey and Syria. The Hill
Barrack has told Iraqi officials he wants the pipeline to serve as a template for other Western-backed projects across the Levant. Middle East Eye The project only became possible after the Trump administration lifted major sanctions on Syria and pulled the country off the State Sponsors of Terrorism list following the fall of Bashar al-Assad. Pipeline-journal
Why Iraq is desperate
Baghdad has no leverage right now, and everyone knows it. Iraq exports 95 percent of its oil through the Strait of Hormuz, and oil sales make up 90 percent of the state budget. Energy analytics firm Vortexa reported that Iraq’s seaborne oil exports in May came in at just 8 percent of the prior year’s average. Middle East Eye
That is a national emergency dressed up as an infrastructure deal. While the pipeline sits offline, Iraq has been trucking crude across Syria to Baniyas — somewhere between 10,000 and 220,000 barrels a day, moved by road. Crypto Briefing
The market backdrop
Tuesday was violent. West Texas Intermediate futures rose 1.5 percent to close at $79.34 a barrel and Brent gained 1.72 percent to settle at $84.73. The U.S. military struck Iran again and reimposed its blockade of Iranian ports at 4 p.m. Eastern, according to U.S. Central Command. Trump dropped his demand that ships pay a 20 percent cargo fee to cross Hormuz, saying Gulf states would invest in the U.S. instead — he backed off after the shipping industry pushed back and the International Maritime Organization said mandatory tolls in the strait are illegal. CNBC
Iran’s Revolutionary Guard said it hit two supertankers running through the strait with transponders off. The UAE’s ADNOC confirmed two of its tankers were struck, killing one mariner and injuring others. CNBC Rory Johnston, founder of research firm Commodity Context, said traffic through Hormuz is grinding to a halt and that the stock cushion that absorbed the earlier shock has largely been drained. Al Jazeera
What it means for business
For Chevron and the American contractors lining up behind it, this is a multibillion-dollar build in a country that just told Washington it prefers U.S. capital to anyone else’s. Al-Zaidi called the American partnership the most important strategic relationship in the world, and said it is about money, not emotion. The Hill
For oil buyers, the math is simpler. Roughly a fifth of the world’s petroleum moves through Hormuz. A restored 300,000-barrel line to the Mediterranean would price Iraqi crude against European and African benchmarks instead of Asian ones Crypto Briefing — and take that volume out of Iran’s reach entirely.
Trump and al-Zaidi both said the remaining U.S. forces in Iraq, under 2,000, would be fully out by September 30 — the same date Iraq’s armed factions are supposed to disarm. Al Jazeera American oil companies are meant to fill the space the soldiers leave.
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