Iraq to export crude and naphtha through Syria after Strait of Hormuz closure

Iraq is sending its oil west. With the Strait of Hormuz effectively shut down amid the ongoing US-Iran conflict, Baghdad has struck a deal to export crude and naphtha through Syria’s Mediterranean ports, starting in July 2026.

The plan calls for 50,000 barrels per day to flow through the Syrian route, primarily via the port of Baniyas. For a country where oil revenues account for roughly 90% of the national budget, this isn’t a strategic preference. It’s an economic survival move.

The new pipeline to the Mediterranean

The Iraqi cabinet approved the arrangement in early June 2026, greenlighting the transportation, storage, and handling of crude oil through both Baniyas and Tartus ports on Syria’s coast.

The ambition goes well beyond 50,000 bpd. Iraq aims to truck up to 650,000 tons of oil per month along this route.

Syria is expanding facilities at Baniyas to handle the rising volumes.

How Iraq got here

When the US-Iran conflict escalated in early 2026, that dependency became an acute vulnerability. In April, Iraq was managing just 10,000 to 15,000 bpd through alternative channels. By June, that figure had climbed to an average of 140,000 bpd, up from approximately 122,000 bpd in May.

What this means for oil markets and investors

For global oil pricing, the math is straightforward. Iraq’s current alternative exports of 140,000 bpd barely register against a global market consuming roughly 100 million bpd.

The risk that keeps traders up at night is escalation. The same conflict that closed Hormuz could easily spill into the overland routes Iraq is now depending on.

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