U.S.-led investment to transport Iraqi oil to the Mediterranean aims to reduce the strategic importance of the Strait of Hormuz

Since the U.S.-Iran conflict erupted on February 28, Iran has repeatedly attempted to block the Strait of Hormuz, triggering significant global oil price fluctuations. Recently, Iraq and Syria signed an agreement in Washington to repair and rebuild a pipeline as an alternative route to bypass the Strait of Hormuz.

U.S.-led investment to transport Iraqi oil to the Mediterranean

Iraq and Syria signed a pact in Washington, the U.S. capital, on Friday (July 17), aiming to restore and reconstruct an oil pipeline that would provide an alternative route around the Strait of Hormuz.

This oil pipeline stretches from Kirkuk in northern Iraq to the Mediterranean coast of Syria. Since the 2003 Iraq War, the pipeline has been closed due to damage sustained over the years.

The agreements were signed by two state-owned companies: Basra Oil Company from Iraq and Syrian Petroleum Company from Syria. The signing ceremony was presided over by U.S. Energy Secretary Chris Wright, underscoring that this is a strategically significant project primarily backed by American companies.

Before the signing, U.S. Energy Secretary Wright stated, “Iraq has tremendous potential to increase its oil production, reduce dependence on hostile neighboring countries, and bring freedom, prosperity, and abundant energy to its people.”

The U.S. Department of State welcomed the agreement, stating that the United States supports the restoration and reconstruction of the Iraq-Syria crude oil pipeline “as a priority infrastructure project with bilateral and regional strategic significance.”

The statement emphasized: “Both Iraq and Syria recognize the strategic goal of restoring a vital energy corridor that will connect Iraq’s oil production to Mediterranean export markets and broader international markets.”

It further stressed: “The United States welcomes the participation of an international consortium led by American entities in executing the technical and financial aspects of this project. Upon completion, this pioneering initiative will initially have the capacity to transport 2 million barrels of crude oil per day.”

Iraqi Prime Minister visits U.S., signs 48 agreements

On Tuesday, Iraqi Prime Minister Ali al-Zaidi met with U.S. President Trump at the White House and reached up to 48 agreements. Trump stated that Iraq “has extremely rich oil reserves” and that the United States will establish a long-term partnership with Prime Minister Zaidi.

Zaidi declared that the United States is Iraq’s “most important strategic partner in the world.” Iraq currently holds the fifth-largest proven oil reserves globally. Choosing the United States as the destination for his first international visit highlights the deep economic ties between the two nations.

As the second-largest oil producer within OPEC, Iraq has suffered significant impacts since the outbreak of the Iran war at the end of February. Limited pipeline options have forced Iraq to rely solely on its southern port city of Basra on the Persian Gulf to export oil to global markets.

According to OPEC data, Iraq’s oil production dropped by more than 50% in June, falling to about 1.9 million barrels per day—down from approximately 4.2 million barrels per day before the Iran war began in February.

Several Gulf states are also seeking to expand their oil pipeline capacities to reduce reliance on the Strait of Hormuz. The UAE is constructing a second pipeline to Fujairah Port on the Gulf of Oman, which will double its oil export capacity outside the Strait of Hormuz. Saudi Arabia is also considering expanding its pipeline to the Red Sea, aiming to increase daily capacity by 2 million barrels.

On the 18th, after the U.S. military completed its seventh consecutive night of strikes, Iran again launched missiles and drones toward U.S. allies in the Gulf region.

Currently, the U.S. and Iran continue their ongoing confrontation over shipping through the Strait of Hormuz. The U.S. claims it is enforcing a maritime blockade targeting Iranian ports, while Iran asserts it has intercepted vessels violating its navigation rules.

Iranian media cited statements from the Islamic Revolutionary Guard Corps, claiming that two oil tankers exploded and caught fire while passing through the strait, allegedly due to navigating mine-laden routes. However, the U.S. Central Command denied these claims.

According to data from the ship-tracking website MarineTraffic, vessel traffic through the Strait of Hormuz has dropped to a three-week low. In the past 24 hours, only six ships passed through this waterway.

International oil prices rose over 4% on Friday, surging above $86 per barrel—the highest level in over a month.

A spokesperson for UN Secretary-General António Guterres expressed concern over the escalating situation, particularly regarding attacks on civilian infrastructure in Iran and across the region.

Source: rfi

Original article: toutiao.com/article/1871094492630026/

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