Reviving the Kirkuk-Baniyas Pipeline: A Strategic Gamble for Iraqi Oil Exports

Iraq’s recent delegation to Damascus to study the restoration of the mothballed Kirkuk-Baniyas oil pipeline marks a pivotal moment in Middle Eastern energy diplomacy. The pipeline, dormant since the 1980s, holds the potential to transform Iraq’s export capacity and regional influence—if geopolitical and logistical hurdles can be overcome.

A Pipeline’s History and Potential

The Kirkuk-Baniyas pipeline, originally completed in 1952, once stretched 800 kilometers from Iraq’s oil-rich Kirkuk fields to Syria’s Mediterranean port of Baniyas, with a peak capacity of 1.4 million barrels per day (bpd). Today, it lies largely in ruins, damaged by decades of war and neglect. Iraq’s push to revive it aims to diversify exports beyond Turkey’s Ceyhan terminal, which faces political risks, and tap into European markets.

The delegation’s visit comes amid cautious warming of Iraq-Syria relations. In March 2025, Iraqi Prime Minister Mohammed Shia al-Sudani invited Syria’s interim leader Ahmad al-Sharaa to the Arab League Summit in Baghdad—a symbolic gesture underscoring Iraq’s desire to normalize ties while prioritizing security.

Strategic Imperatives and Economic Benefits

For Iraq, the pipeline represents more than just an infrastructure project. It could:
- Reduce reliance on Turkey: By 2025, Iraq exports over 4 million bpd via Turkey’s Ceyhan terminal, but Ankara’s geopolitical ambitions and Kurdish tensions complicate this route.
- Boost European access: A revived pipeline could transport 300,000–500,000 bpd to European markets, complementing Iraq’s existing Gulf-based exports.
- Stimulate regional trade: The pipeline could anchor broader infrastructure projects like Iraq’s Development Road, a transcontinental corridor linking the Gulf to Europe.

BP’s involvement adds financial weight. The British firm’s $10 billion agreement to redevelop Kirkuk’s oil fields—expected to boost production by 1 million bpd by 2030—could directly feed into the pipeline.

Challenges and Risks

However, the project faces formidable obstacles:
1. Infrastructure Costs: Rehabilitation is estimated at $8 billion, with Syria’s war-ravaged segment requiring 70% of the investment.
2. Security Concerns: ISIS retains ~2,500 fighters in Syria and Iraq, while Kurdish-SDF tensions and Turkish military operations add instability.
3. Geopolitical Risks: Syria’s sanctions regime (including U.S. and EU measures) blocks foreign investment, and al-Sharaa’s controversial ties to militant groups raise diplomatic red flags.

BP’s stock (LON:BP) has risen 15% since late 2024, buoyed by Kirkuk’s potential—but investors remain wary of geopolitical risks.

The Geopolitical Landscape

• Syrian Participation: Syria’s transitional government has called the pipeline “not a priority,” citing infrastructure costs and instability.
• Regional Rivalries: Iran opposes the pipeline as it could reduce Tehran’s transit role, while Turkey views it as a threat to its Ceyhan terminal.
• Sanctions Loopholes: Revival would require sanctions exemptions—unlikely without U.S. or EU concessions tied to Syria’s governance reforms.

Investment Implications

For investors, the pipeline’s revival hinges on three factors:
1. Security Stabilization: Reduced ISIS activity and SDF-Turkey conflict are prerequisites.
2. Funding Sources: Gulf investors (e.g., UAE, Qatar) or Chinese firms (via Belt and Road) may step in if sanctions ease.
3. Political Will: Baghdad and Damascus must overcome decades of distrust.

Conclusion: A High-Reward, High-Risk Venture

The Kirkuk-Baniyas pipeline’s potential is undeniable—300,000 bpd capacity could generate $10–15 billion annually in export revenue for Iraq. Yet, the risks are stark:

• Costs: Rehabilitation requires $8 billion, with Syria’s unstable governance making international financing nearly impossible.
• Timing: Even optimistic timelines suggest 2030 as the earliest operational date, contingent on sanctions removal and regional stability.
• Alternatives: Iraq’s Grand Faw Port (GFP)—projected to handle 120 million tons annually by 2030—offers a safer near-term bet, though it faces Kuwaiti maritime disputes.

Investors should monitor Syrian political progress, BP’s Kirkuk production targets, and Arab League diplomatic shifts. While the pipeline’s revival could redefine Middle Eastern energy dynamics, it remains a long shot—best suited for risk-tolerant players with a 5–10 year horizon.

As Iraq’s delegation departs Damascus, the stakes are clear: a functional Kirkuk-Baniyas pipeline could solidify Baghdad’s role as a global energy powerhouse—or become another symbol of the region’s enduring instability.