Over five months, Syria’s port of Baniyas became a new outlet for Iraqi energy. Iraq began sending fuel oil through Syria for export from the Mediterranean in April 2026. In September, it began using the same route in reverse, importing gasoline through Baniyas and carrying it overland into Iraq via the al-Waleed crossing.

The shift followed a crisis that exposed Iraq’s dependence on the Gulf. Before shipping through the Strait of Hormuz was disrupted by the US-Israeli war on Iran, Iraq’s southern ports handled most of its oil exports, averaging nearly 3.4 million barrels per day.

As crude could no longer be shipped out and storage tanks filled, production from the main southern fields fell from about 4.3 million barrels per day to 1.3 million on 8 March. Iraq’s state oil marketer, SOMO, said exports from the southern ports stopped that day. Baghdad subsequently began directing some shipments to other routes.

With the bottleneck persisting, Baghdad began considering the Syrian route as part of a broader effort to diversify its energy outlets. In July, Basra Oil Co. joined US energy company Chevron and Qatar’s UCC Holding in arrangements to study alternative pipelines. One option would connect southern Iraq’s fields to the Haditha corridor and then the Syrian coast.

Why did Iraq need Baniyas?

The crisis first hit southern Iraq, where Baghdad relies on Basra’s ports to export most of its crude. When tanker traffic through Hormuz was disrupted in March, storage tanks quickly filled. Companies cut production by about 1.5 million barrels per day in the first days, including roughly 700,000 barrels at Rumaila, 460,000 at West Qurna-2 and 325,000 at the Maysan fields.

Iraq’s refineries were consuming about 1.1 million barrels of crude per day, but could not absorb the oil intended for export. As storage filled, production had to fall.

SOMO’s figures show the scale of the blow to exports. Iraq exported 107.62 million barrels of crude in January, equivalent to about 3.47 million barrels per day. In March, that fell to about 18.6 million barrels, or an average of roughly 600,000 barrels per day. Exports recovered to 73.688 million barrels in August, or about 2.377 million barrels per day, but the daily average remained about 31.5 per cent below January’s.

The disruption also affected refineries. As exports of heavy fuel oil through Khor al-Zubair faltered, the product accumulated in storage. Continued refining used up more capacity, putting pressure on units that also produce gasoline and diesel. Finding an outlet for fuel oil therefore mattered to the refineries’ ability to keep operating and supply the domestic market.

Iraq exported 2.116 million metric tons of fuel oil in the first quarter of 2026, an average of about 705,000 tons a month. SOMO then awarded contracts to move about 650,000 tons a month through Syria from April to June, close to the monthly average before the crisis.

In June, Iraq’s Oil Ministry said about 1 million tons of fuel oil had been trucked to Syria and Jordan that month. Data from energy shipment tracking firm Vortexa showed about 720,000 tons leaving Syrian ports alone, indicating how quickly the overland route had begun to ease pressure on Iraqi refineries.

The corridor became useful for another reason when Iraq faced a gasoline shortfall. In November 2025, the government had announced that expanded refining capacity had made the country self-sufficient in gasoline, gas oil and kerosene. Yet SOMO recorded imports of 118,298 tons of gasoline in the first quarter of 2026.

On 4 September, the Iraqi oil minister said gasoline consumption normally stood at about 33 million litres a day and could rise to 38 million when demand increased. Two days later, the ministry estimated daily demand at about 35 million litres and the shortfall at about 5 million.

Baniyas then became a gateway for gasoline imports. The first confirmed cargo carried between 32,800 and 33,000 tons of upgraded gasoline, equivalent to about 37 million litres — close to a week’s supply if the shortfall remained at 5 million litres a day.

Iraqi Oil Ministry spokesman Salim al-Rikabi said SOMO had signed the contract with UCC Holding. The gasoline arrives by sea at Baniyas and is then taken by tanker truck to Iraq, giving Baghdad a Mediterranean import route away from tanker traffic in the Gulf.

How does the Baniyas-Iraq corridor work?

The corridor carries fuel in both directions. Westbound trucks take Iraqi fuel oil to Baniyas, where it is unloaded into storage facilities and then pumped onto seagoing tankers for export. Eastbound trucks carry imported gasoline from the port into Iraq.

Initially, truck traffic used the al-Waleed crossing in Anbar province, opposite al-Tanf on the Syrian side. As the number of trucks grew, Baghdad reopened the Rabia crossing in Nineveh on 20 April after more than a decade of closure. Omar al-Waeli, head of Iraq’s Border Ports Commission, said the move would ease pressure on al-Waleed by dividing traffic between routes through Anbar and Nineveh.

On the coast, the Syrian Petroleum Co. said it had prepared additional yards, increasing Baniyas’s capacity to unload about 900 tanker trucks a day.

Each truck carries about 20 tons of product, or roughly 135 barrels. The journey to Syrian or Jordanian ports takes between four and six days, so sustaining traffic at that rate requires thousands of vehicles moving between loading sites, border crossings and the coast.

Even at full capacity, 900 truckloads amount to about 120,000 barrels a day. Iraq had been exporting more than 3 million barrels a day through its southern ports before the crisis. The overland route can therefore ease bottlenecks for products such as fuel oil, but cannot carry comparable volumes.

Syrian economic expert Mahmoud Abdul Karim estimated in April that the route’s actual flow was about 100,000 to 125,000 barrels a day.

As traffic became regular, Baniyas gave Iraqi products access to markets across the Mediterranean and beyond. In July, commodities data firm Kpler tracked Aframax tankers carrying Iraqi fuel oil from Baniyas to the US, alongside shipments to Spain and Egypt. Three tankers tracked by the firm carried about 716,600, 288,500 and 414,400 barrels respectively.

At that point, fuel oil was the only product being exported from Baniyas, while Baghdad was preparing to send about 50,000 barrels of crude a day through Syria. In the opposite direction, gasoline tankers arrive at Baniyas, unload into storage tanks and supply trucks crossing Syria into Iraq.

Tarek Shallash, deputy executive president of the Syrian Petroleum Co., said the first gasoline shipment arrived aboard the Avanti with about 32,800 tons. By 25 September, 77 trucks had left Baniyas for Iraq. Shallash said UCC Holding was participating in the contract as the supplier and transport supervisor.

More shipments followed. Data from the London Stock Exchange Group (LSEG), which provides market and shipping information, showed that the tanker Gaeta had loaded gasoline in Houston and headed for Baniyas.

On 26 September, Safwan Sheikh Ahmad, the Syrian Petroleum Co.’s director of institutional communications, said Syrian ports had received three tankers carrying petroleum products. The first had unloaded 32,000 tons of gasoline; the other two were waiting. He said the ports were ready to increase loading capacity to 150 tanker trucks a day.

Syria receives transit fees and service charges from the fuel oil traffic, though neither Baghdad nor Damascus has announced an agreed official figure. Abdul Karim estimated in April that overland transport cost between $5 and $10 a barrel, with Syrian transit fees of $1.50 to $3 a barrel. At flows of 100,000 to 125,000 barrels a day, those fees could bring Syria between $150,000 and $375,000 daily.

Rising shipping prices in the Gulf made the overland route easier for Baghdad to afford. Iraqi Oil Minister Bassem al-Abadi said in September that the cost of shipping a barrel of crude had risen from $26 to $37, while transport on some very large crude carrier routes exceeded $30 a barrel. That narrowed the cost difference between the Syrian route and sea routes affected by higher freight and insurance prices.

Will the Syrian route become a permanent outlet?

Since the summer, Baghdad has been studying a wider export network. On 4 July, state-run Basra Oil Co., which is responsible for production in southern Iraq, joined arrangements to study alternative pipelines with a group that includes Chevron and UCC Holding. The options included moving oil from southern Iraq to the Haditha corridor in the west and then to outlets beyond the Gulf, including the Syrian coast.

The proposal differs from the historic Kirkuk-Baniyas pipeline, which connected northern Iraq’s fields to the Mediterranean. Southern fields now account for the centre of Iraqi production. A large-scale outlet through Syria would therefore need a network starting in Basra and running west across Iraq to the border, requiring substantial investment.

Sources familiar with the matter told Reuters on 17 August that a new pipeline to Baniyas could take about four years to build and cost at least $15bn. Technical and financial studies were still under way.

Syria is one part of Baghdad’s plans. In August, Iraq reached a one-year arrangement with Ankara aimed at increasing flows through the Iraq-Turkey pipeline to the port of Ceyhan to at least 750,000 barrels a day. Flows stood at around 170,000 barrels a day on 21 August.

Iraqi Prime Minister Ali Falih al-Zaidi also spoke of expanding capacity through Ceyhan, developing a route to Baniyas and continuing plans for an outlet through Jordan’s Aqaba.

The March crisis made these projects more pressing. The halt in southern exports showed Baghdad how quickly full storage tanks could force cuts in production. Multiple routes for exports and imports became an energy security priority.
Trucks offer a way to move particular products during a crisis. Pipelines could carry larger volumes at lower cost over time, alongside expanded domestic refining capacity and reduced dependence on a single route through the Gulf.
Fuel oil shipped from Baniyas has already reached markets outside the region. Matt Smith, lead oil analyst at Kpler, said the rise in exports through the port coincided with buyers, including US Gulf Coast refineries, seeking supplies to replace Middle Eastern shipments that had declined during the crisis.
The first months of operation also exposed constraints on any expansion. Queues of tanker trucks stretched for more than 30 kilometres near Baniyas. In June, a collision between two Iraqi trucks near Homs spilled thousands of litres of fuel. Parts of Syria’s road network and energy facilities need extensive repairs, with costs likely to rise as traffic and the volumes in transit increase.
Conditions in Syria’s own fuel market add a political complication. In September, rises in diesel and gasoline prices prompted protests and road closures, and local protests stopped tanker convoys in some areas.
Those events coincided with the temporary closure of the Baniyas refinery for maintenance and Syria’s growing reliance on imports. Syrian officials stressed that the gasoline bound for Iraq was imported and had not been diverted from supplies allocated to the domestic market.
Security and insurance would also add to the cost of long-term expansion. The overland route crosses desert areas and roads that have experienced security disruptions in recent years. A pipeline stretching hundreds of kilometres would need protection, as well as a long-term Iraqi-Syrian agreement on fees, ownership, maintenance and investment. Those terms would be essential for a project expected to cost billions of dollars and operate for decades.
The Hormuz crisis has thus pushed Iraq to use Syria as a route for exporting fuel oil and importing gasoline. Whether Baniyas becomes a permanent, larger-scale outlet depends on Baghdad’s ability to develop a pipeline network beyond the current truck route.