Saudi Gives Preliminary Approval to Revive 1,568-Kilometer Iraqi Oil Pipeline
Key Facts
Shafaq News reported on October 31, citing informed sources, that Saudi Arabia had given preliminary approval to revive a joint oil export pipeline with Iraq, paving the way for discussions on restoring a route that has been inactive for decades. The approval does not mean the two countries have reached a final agreement or set implementation terms, the outlet reported. Riyadh is likely to build a replacement pipeline, as rehabilitating the existing one would cost nearly as much as building a new line, according to Iraq News. Iraq would need to cover part of the cost of the section on its territory. The route remains contingent on a political understanding and a settlement of ownership issues and legal rights before it can move forward.
The pipeline runs about 1,568 kilometers from the Zubair field in Basra province to Yanbu port on Saudi Arabia's Red Sea coast, Shafaq News reported. The pipeline was built in the 1980s and stopped operating in 1990 after Iraq invaded Kuwait. Since then, the use of the Saudi section of the route has changed, with the kingdom repurposing it to transport its crude from the east of the country to the Red Sea. Iraq, meanwhile, would need to rebuild its section of the pipeline if the project were revived. The difference in the status of the sections puts implementation and ownership among the issues the two sides must resolve.
Shafaq News said one of the main obstacles concerns the Iraqi section of the pipeline inside Saudi Arabia, which the kingdom seized in 2001. Resuming the project would require settling ownership of that section and the associated legal rights, according to the report. Saudi Arabia's use of the route to transport its own oil also makes agreement on arrangements for a new or rebuilt pipeline part of the required political understanding. The report did not cite a final agreement on these issues or a timeline for resolving them. Preliminary approval therefore marks the start of a negotiating process, while the terms for reconnecting the route, costs and rights remain open.
The move comes as Iraq works to expand its export routes. Prime Minister Ali al-Zaidi called on August 29 to accelerate an oil export pipeline project, saying that diversifying export routes and increasing export capacity were of strategic importance. On November 1, Shafaq News reported that Iraqi oil exports through the port of Ceyhan had risen to 500,000 barrels per day from 350,000 barrels per day before the increase, after crude from southern fields was routed through the Iraq-Turkey pipeline. Iraq's average exports reached about 3.5 million barrels per day in October, up from 2.65 million in September, Reuters reported on November 4. Shipments through Ceyhan were about 400,000 barrels per day in October, compared with 250,000 in September, the same report said. These figures reflect expanded flows through the Turkish route during those periods, while the Saudi-Iraqi pipeline remains at the preliminary approval stage.
In a related expansion plan, the Iraqi prime minister's office said on November 5 that Baghdad aims to raise oil production to 10 million barrels per day, following a meeting with representatives of a consortium involved in a proposed pipeline project to ports on the Mediterranean and Red Sea. The office did not set a date for reaching the production target. This comes as efforts to diversify exports span existing routes and proposed projects, including the Iraq-Turkey pipeline and its announced one-year agreement in August, with a minimum export volume of 750,000 barrels per day through Kirkuk-Ceyhan. On the market, the U.S. Energy Information Administration estimated average Brent crude at $114 per barrel in September, up $23 from August, following attacks on oil facilities and tankers in the region. In its outlook issued in October, the agency said it assumes oil flow restrictions from the Middle East will continue through the fourth quarter of 2026 and forecasts average Brent at $105 per barrel in that quarter.