Alternatives to the Strait of Hormuz: How does Iraq plan to free its oil exports from the “single outlet”?

Alternatives to the Strait of Hormuz: How does Iraq plan to free its oil exports from the “single outlet”?

2026-08-20

Shafaq News – Baghdad/Kirkuk/Erbil
The Iraqi oil export crisis is no longer just a challenge related to delivering crude oil to global markets, but has turned into a real test of the state’s ability to protect its main financial resource in light of the geopolitical changes taking place in the region, most notably the disruption of navigation in the Strait of Hormuz, which has brought back to the forefront a question that has been raised for years: Can Iraq get rid of dependence on a single export outlet?

This question was the focus of the expanded meeting held by Prime Minister Ali Faleh al-Zaidi with the leaders of the Ministry of Oil, during which he called for moving from the stage of diagnosis to implementation, stressing that the government does not want excuses as much as it wants practical solutions and tangible results within a short period, because every barrel of oil that does not reach the markets represents a direct loss to the state treasury and a delay in funding salaries and services.

He also directed that the rehabilitation and development of oil pipelines be expedited, contracts be signed with international companies to market and sell Iraqi oil, alternative export outlets be expanded, and work be done around the clock to turn the current crisis into an opportunity to develop the oil infrastructure.

These directives do not come out of nowhere, as the Iraqi economy depends almost entirely on oil revenues, which means that any decline in exports is directly reflected in the general budget and government spending. This has prompted the government to adopt a vision based on diversifying export routes, instead of tying exports to a single route that may be affected by any political, security or technical development.

An oil source told Shafaq News Agency that the Ministry of Oil has begun preparing an integrated plan to diversify export outlets, based on more than one route, most notably developing existing pipelines, studying the establishment of new lines, in addition to using truck transport as an interim solution that ensures the continued flow of crude oil until the strategic projects are completed.

The source explained that the Kirkuk-Ceyhan pipeline is the fastest option from a technical standpoint, due to the existence of a ready infrastructure that can be developed and its capacity increased. Meanwhile, the government continues to study the reactivation of the western route towards the Syrian port of Banias, in addition to the Basra-Haditha project, which could become a strategic hub in the future linking the southern fields to the western and northern ports, all the way to Jordan and the Red Sea.

He added that implementing these projects requires extensive cooperation with international companies specializing in the design, construction and operation of pipelines, as well as providing financing and technical expertise, because Iraq needs large investments that the general budget alone cannot bear.

While attention is focused on finding new outlets for crude oil exports, the government emphasizes that the vision does not stop at increasing exports, but extends to rebuilding the philosophy of managing oil wealth itself.

In this context, the Prime Minister’s Advisor for Financial and Economic Affairs, Mazhar Muhammad Salih, confirmed in a statement to Shafaq News Agency that the Prime Minister’s directives during his meeting with the leaders of the oil sector were based on strategic paths that keep pace with the need to maximize value-added chains, as one of the most important pillars of economic diversification.

Saleh said that crude oil should not be viewed merely as a raw material for export, but as a strategic resource whose returns can be maximized through the expansion of manufacturing industries and the production of oil derivatives and petrochemicals. He explained that manufacturing one barrel of crude oil may achieve an economic value equivalent on average to the value of seven barrels of crude, which reflects the importance of industrial integration and deepening local content in the energy sector.

He added that the world is witnessing an accelerating shift from the concepts of “geopolitics” to “economic geography,” as countries no longer focus solely on oil production sites, but have become interested in establishing oil industries near ports and major consumer markets, and creating strategic reserves for crude oil and derivatives in global storage centers, which enhances the flexibility of supplies and reduces the impact of geopolitical crises.

Saleh pointed out that this vision represents a national strategy to link the energy sector with industry, transportation, logistics and trade, stressing that the future of energy is no longer measured by the size of reserves and production only, but by the ability of countries to transform their natural resources into integrated industrial, logistical and technological systems that achieve economic security and sustainable development.

Observers believe that this proposal intersects with government moves aimed at creating a multi-path export network, so that the role of the new pipelines is not limited to transporting oil, but rather becomes a pillar for building industrial zones, storage centers and logistics services that raise the added value of the oil sector.

For his part, oil expert Ali Khalil told Shafaq News Agency that diversifying oil export outlets is no longer a technical option or a long-term project that can be postponed, but has become an economic and security necessity, because continuing to rely on a single outlet makes the Iraqi economy more vulnerable to shocks.

He explained that the Kirkuk-Ceyhan line represents the fastest solution at the present stage, but it is not enough on its own, pointing out the need to proceed in parallel with the project to connect with the port of Banias, and to complete the Basra-Haditha project, which will allow Iraq in the future to distribute its exports between more than one outlet according to the political and security conditions and market requirements.

He added that trucking can play an important role during the transitional phase, especially in transporting crude oil from the fields to collection centers or border crossings, but it is not a permanent solution due to its high cost compared to pipelines, as well as the limited quantities that can be transported, and the need for an integrated logistics infrastructure that includes transport fleets, loading and storage stations, and electronic tracking systems.

Khalil stressed that the success of this plan requires attracting international companies, not only to implement the pipelines, but also to participate in financing, management and technology transfer, through long-term contracts and partnerships that ensure Iraq benefits from international expertise while preserving its sovereignty over its oil wealth.

Economic experts point out that diversifying export outlets not only protects oil revenues, but also improves Iraq’s negotiating power with markets and transport companies, reduces the risk of export stoppages, and attracts new investments in storage, petrochemical industries, transport, and logistics.

Furthermore, building an integrated network of pipelines and outlets gives Iraq greater flexibility in directing its exports according to circumstances, so that the disruption of one route does not lead to a complete halt in exports, which represents a radical shift in the management of the oil sector compared to the traditional model based on dependence on a single main outlet.

Experts agree that the success of this strategy will not be measured by the number of pipelines that will be built, but rather by Iraq’s ability to transform its oil wealth from a resource dependent on exporting crude oil into a base for establishing advanced industries and value-added chains that boost revenues, provide job opportunities and support economic diversification.

Between the Prime Minister’s directives that stressed practical solutions, the government’s vision to maximize added value, and the opinions of experts on the need to diversify the routes, it seems that Iraq is facing an opportunity to redraw its oil export map, not only to confront an immediate crisis, but to build a more flexible and sustainable system capable of protecting the national economy from the fluctuations of politics and geography, and transforming oil from a mere export commodity into a major driver of economic development in the coming decades.

shafaq.com