The Kirkuk-Baniyas Pipeline Revival: A US-Backed Plan to Bypass the Strait of Hormuz

On July 17, 2026, Iraq and Syria signed a Memorandum of Understanding (MoU) in Washington to rehabilitate the historic Kirkuk-Baniyas crude oil pipeline, a project backed by the US administration and designed to offer an alternative export route that bypasses the Strait of Hormuz . The MoU was signed during a US-Iraq Business Council meeting, with US Energy Secretary Chris Wright in attendance, as part of Iraqi Prime Minister Ali Al-Zaidi's visit to the United States . US Special Envoy for Syria and Iraq Thomas Barrack convened discussions with officials from both countries and American energy companies, including Chevron, to advance the project .

Specifications of the Kirkuk-Baniyas Pipeline

The pipeline, originally built in 1952, connects the Kirkuk oil fields in northern Iraq to Syria's Mediterranean port of Baniyas . It has been inoperative since 2003, when it suffered damage during the US-led invasion of Iraq, and its infrastructure requires extensive repairs including new pumping stations, storage tanks, and electrical systems .

Specification	Detail
Length	~800 km (some sources cite 850–891 km)
Original capacity	300,000 barrels per day (bpd)
Planned expanded capacity	Dual-line configuration capable of 1.5 million to 2 million bpd
Status	Built 1952; inoperative since 2003; requires full rehabilitation
Route	Kirkuk oil fields (northern Iraq) → Haditha → Syria's Baniyas

The rehabilitation plan contemplates a modern dual-line system that would carry both heavy and light crude, with some sources indicating a capacity of up to 2.2 million bpd . Construction is estimated to take approximately 36 months .

Consortium and Key Members

The initial study phase involves a consortium that includes US oil major Chevron, US investment firm Capital TI, and Qatari partner UCC . Iraq's cabinet approved Basra Oil Company signing a heads of agreement and a non-disclosure agreement with this consortium to prepare technical and financial feasibility studies for strategic oil export pipeline projects .

• Chevron is the US energy company designated to lead the actual construction and rehabilitation of the pipeline . The company also signed a separate framework agreement with the governments of Iraq and Syria to carry out the project .
• Capital TI is the US investment firm that brokered the initial MoU and signed the non-disclosure agreement for the feasibility studies .
• UCC of Qatar rounds out the consortium as the third partner .

Estimated Cost

Cost estimates vary widely, reflecting the difference between rehabilitating the existing single line versus building a new dual-capacity system:

• $4.5 billion — lower bound, for a modern dual-line configuration
• $4.5 billion to $8 billion — the range most commonly cited by multiple outlets
• ~$8 billion — higher-end estimates for full rehabilitation to higher capacity, including restoring the old line to 700,000 bpd

These figures are preliminary, as the consortium has yet to complete its feasibility studies . Some earlier estimates suggested rehabilitating the old line to 700,000 bpd would cost around $8 billion, while building entirely new dual pipelines could cost roughly $4.5 billion .

Strategic Purpose: Bypassing the Strait of Hormuz

The revival of the Kirkuk-Baniyas pipeline is a direct strategic hedge against Iran's ability to block the Strait of Hormuz, a narrow chokepoint through which roughly 20 million bpd of oil passes . A US State Department official stated that the route "could reduce Iran's ability to block oil supplies through the Strait of Hormuz" . Iran has periodically threatened to close the strait amid US-Iran hostilities, making the pipeline a critical piece of energy security infrastructure .

By routing Iraqi crude overland to the Mediterranean at Baniyas, the pipeline creates a Hormuz-bypass corridor, allowing Iraqi exports to reach global markets via the Mediterranean Sea without transiting the Persian Gulf . The US State Department described the project as "a priority infrastructure project" .

Broader $60 Billion Energy Package

The pipeline MoU is one component of a much larger series of agreements totaling more than $60 billion in value, signed between Iraq and Western (predominantly US) oil companies during Prime Minister Al-Zaidi's Washington visit . Reuters confirmed that "agreements, MOUs signed at the summit exceeded $60 billion" , while the Associated Press reported "roughly $60 billion in agreements and partnerships" .

Key components of the broader package include:

• ConocoPhillips agreed to acquire a 42% stake in BP Energy of Kirkuk Ltd, partnering with BP to redevelop the giant Kirkuk oil fields . The venture aims to reverse output decline since the Iran war began .
• BP will continue as lead operator of the Kirkuk field redevelopment, with ConocoPhillips joining as a major partner .
• Chevron is separately engaged in talks and preliminary agreements for exploration blocks including Nassiriya and West Qurna 2, in addition to its role in the pipeline project .
• The agreements cover oil and gas field development, power infrastructure, and new export routes, including both the Kirkuk-Baniyas pipeline and other export diversification projects .

The deals are part of a broader US strategy to deepen energy ties with Iraq and reduce the region's dependence on Hormuz transit routes amid the ongoing US-Iran conflict .