Editor’s Note: Omar Al-Nidawi is the director of programs at the Enabling Peace in Iraq Center and a nonresident senior fellow with the Iraq Initiative in the Atlantic Council’s Middle East programs.

By Middle East Program Team

The Iran war will be remembered not only for unleashing fighting across the Middle East, but for reshaping the regional energy architecture. This is particularly true for Iraq, where the conflict exposed the extreme vulnerability of an economy dependent on oil exports through a single chokepoint. Within weeks, a major fiscal crisis incentivized Baghdad to pursue renewed energy cooperation with neighbors to diversify export routes and try to reduce that dependence.

Baghdad’s recent discussions have focused on new pipelines carrying Iraqi oil to the Syrian port of Baniyas – and possibly Tripoli in Lebanon – as well as increased flow through the Iraq-Turkey Pipeline (ITP). If successful, these alternatives could strengthen Iraq’s economic resilience while creating new opportunities for regional integration.

Yet, these initiatives, especially a route from the western Iraqi town of Haditha to Baniyas, also face formidable political, financial, technical, and security obstacles. Instead of a solution to this crisis, they should be regarded as an insurance policy against the next one, and even so, the parties may find the premium too high.

The Cost of Dependence on Hormuz

For Iraq, the economic damage of the war so far has brought state finances to the breaking point. Prior to the conflict, Iraq exported approximately 3.5 million barrels of crude oil per day. More than 3.3 million barrels departed from Basra before passing through the Strait of Hormuz. Monthly oil revenues averaged roughly $7 billion and financed every major government obligation — from salaries for millions of public employees to pensions, welfare programs, and basic public services.

When shipping halted through Hormuz, Iraq’s exports collapsed.

Between March and June, exports fell by more than 85%, while monthly revenue dropped below $1.5 billion. Losing more than $5 billion a month, the budget deficit had nearly tripled by the end of May compared to a year ago.

The consequences are alarming. Public-sector salaries have been delayed, ministries have struggled to purchase basic supplies, including medicine, investment spending has virtually disappeared, and officials have openly questioned whether the government can pay for necessities.

The crisis thus transformed the search for alternative export routes from a long-term aspiration into an emergency. But is it too late to make a difference?

An Opportunity Decades in the Making

Iraq had years to prepare but sadly didn’t. Successive governments explored extending pipelines to Jordan’s Red Sea port of Aqaba, expanding exports through Turkey, and restoring long-severed links to Syria. Yet, little materialized.

Some obstacles were beyond Baghdad’s control. The Sunni insurgency and later the ISIS occupation of much of western Iraq and eastern Syria made it impossible to secure pipelines and infrastructure across swaths of desert.

Other impediments were political. Iran-backed factions inside Iraq consistently opposed the Basra-Aqaba pipeline, condemning it as a gift to Israel, likely because it carried the double threat of strengthening Iraq’s ties to Arab neighbors while weakening Tehran’s leverage over energy exports. As a result, Iraq remained overwhelmingly dependent on Hormuz despite clear warnings about the risks of disruptions.

The Iran war has demonstrated just how costly that dependence had become. That’s why energy connectivity featured prominently during Prime Minister Ali al-Zaidi’s recent visits to Washington and Ankara, and during discussions with Syria’s new government and Lebanese Prime Minister Nawaf Salam.

Turkey remains central. After a period of acrimony and disputes over exports from the semi-autonomous Kurdistan region without Baghdad’s approval and a subsequent arbitration case, Baghdad and Ankara are turning over a new leaf. They recently reached an interim extension to the ITP agreement aimed at raising exports from 225,000 bpd to 750,000 bpd. The pipeline, built in the 1970s, has a nameplate capacity of 1.6 million bpd, though intermittent flows since 2003 have rarely exceeded 500,000 bpd. Reaching 750,000 bpd would absorb all the oil that the northern fields in Kirkuk and the Kurdistan region can provide for the foreseeable future.

Iraq is also reviving plans to rehabilitate the Haditha-Baniyas pipeline, which was built in the 1950s, connecting western Iraq to Syria’s Mediterranean coast for export and refining. In addition, officials are exploring extending that system with a branch to Lebanon’s port of Tripoli.

Overview of Iraq’s oil infrastructure and oil fields. Source: Congressional Research Service.

The strategic logic is compelling. Diversifying export routes through the Mediterranean would reduce Iraq’s exposure to future disruptions at Hormuz and deepen economic integration between Iraq, Syria, and Lebanon at a time when all three governments, with Washington’s encouragement, are seeking opportunities for reconstruction and growth outside Iran’s orbit.

There may also be a security advantage. Compared with the Red Sea, where the Houthis pose a serious threat, the eastern Mediterranean appears to present fewer risks to commercial shipping, although that relative security may be fleeting.

The Missing Supply Link

Like the long-delayed Aqaba route, a future pipeline to the Syrian and/or Lebanese coasts would depend on building a 2.25 million bpd pipeline from the major oil fields of Basra to the western desert town of Haditha. This multibillion-dollar project is meant to replace Iraq’s original “Strategic Pipeline” that once allowed oil from the south to move north and west and vice versa, until it was destroyed in the 1991 Gulf War.

Stalled since 2014, this project will likely be a multi-year effort. The announcement by Iraq’s Oil Ministry of an expedited plan to refurbish sections of the damaged pipeline offer little confidence as Iraq’s record when it comes to repairing pipelines is mixed at best. For nine years since the territorial defeat of ISIS, Iraq has been struggling to repair the pipeline section from Baiji to the Turkish border that carried oil from Kirkuk to Turkey until 2013. Statements about imminent completion of repairs have been coming for years, yet there has been little progress.

Pipelines represent only part of the challenge. The ports of Baniyas and Tripoli currently possess limited capacity to receive, store, and load large volumes of crude. Recent reporting suggests Baniyas can handle roughly one Aframax tanker every seven to 10 days — equivalent to approximately 100,000 bpd. Tripoli, meanwhile, requires major work, as it lacks a suitable berth or an operation farm tank to receive and handle large volumes of crude oil.

Left: The oil berth at Baniyas can load a single Aframax tanker with up to 700,000 barrels every 7 – 10 days. Right: The destroyed oil tank farm at Lebanon’s Tripoli port. Images generated from Google Maps.

Expanding either facility would require substantial investment in storage tanks, pumping stations, and port modernization.

There is also the question of competing demand for limited capacity. As Syria works to restore domestic oil production toward pre-war levels of nearly 400,000 bpd, its own exports, though small by comparison, may compete for scarce port capacity.

Whether the current crisis is resolved within weeks or months, Iraq may find it difficult to muster the necessary financial and political commitment to afford these projects.

The longer the crisis goes, the greater Iraq’s financial deficit will grow, and the less able it will be to invest billions in the Basra-Haditha-Baniyas corridor. Even a quick resolution to the crisis may not be enough. Iraqi leaders already feel great pressure to prioritize essential needs, namely salaries and social benefits, over expensive infrastructure projects whose benefits appear distant and hypothetical.

Financing is also a challenge for cash-strapped Syria and Lebanon, which need to invest in their ports and tank farms to accommodate exports that might not materialize for years to come.

All the while, security risks remain substantial. Hundreds of miles of pipelines crossing western Iraq and eastern Syria would require sustained protection against sabotage by ISIS remnants, Iran’s proxies, or other armed actors. These risks would likely lead to elevated financing costs.

Political opposition could also reemerge. The same Iran-aligned factions that previously blocked Basra-Aqaba may resist new projects that reduce Tehran’s ability to use Hormuz as strategic leverage during future confrontations.

A Long-Term Investment in Resilience

Despite these risks, reaching for the Mediterranean still has merit. The status quo is not sustainable, and Iraq’s stopgap measures, such as trucking fuel oil to Baniyas, provide modest relief but are expensive, slow, vulnerable, and can’t replace pipeline-scale exports.

Given all of the above, the renewed discussions about Mediterranean export routes need to be viewed with a mix of measured optimism and realistic expectations about timelines. On the one hand, they are unlikely to solve Iraq’s immediate fiscal crisis, and they will almost certainly require years of construction and billions of dollars in investment – resources that are in short supply.

On the other hand, the significance of these initiatives lies less in the pipelines themselves than in the long-term potential they represent. For the first time in decades, Iraq, Syria, and Lebanon are discussing regional energy integration not as an abstract political ambition but as a practical response to shared strategic vulnerabilities. Whether that momentum produces a resilient export network — or joins the long list of unrealized pipeline schemes — will depend on sustained political commitment long after the current crisis fades.