Baghdad awaits Syrian approval for crude exports
An Iraqi source was quoted as saying on November 2nd that Baghdad is waiting for Syria’s permission to begin exporting crude through a pipeline between the two countries.
The source said that “Iraq is ready to start pumping oil, but this depends on the Syrian side. Whenever the Syrians want the pumping to start, Iraq is ready.”
Iraqi Oil Minister Amer Rasheed had said on November 1st that the Iraqi-Syrian pipeline, closed since 1982 as a result of the tensions between the two countries over the Iran-Iraq war, could be reopened in two to three days.
An agreement between Baghdad and Damascus to reopen the pipeline was inked in July 1998. Syrian Minister of State Ihsan Shraitih said on November 1st “I think any step which would bring the two countries closer we would not hesitate to do,” although Damascus has been largely silent regarding the pipeline project.
Baghdad plans to export 200,000 b/d of Basrah Light crude at a discounted price to Syria to be used in domestic refineries, while Damascus will export an equivalent amount of Syrian Light and Suwaidiyah crudes to international customers.
Iraqi sources had indicated that the planned exports to Damascus would fall outside of the UN-administered oil-for-food program. Any additional export routes than the Mina al-Bakr and Ceyhan options would require UN approval, which members of the sanctions committee have suggested is unlikely for a number of reasons, including that Baghdad’s current production capacity doesn’t justify a third export option.
A US State Department source tells Oil Navigator that Washington would oppose granting an exemption to Syria that is similar to the Iraqi-Jordanian trade deal and that Syria would be in breach of UN sanctions if it opened the line without approval from the U.N. sanctions committee.
“It would be a clear, unambiguous violation,” the source said. In addition, he said that “The Syrians are gutless… It would be a big stepping out for Damascus if it went against the sanctions, and I don’t believe the Syrians are prepared to do it.” - (oilnavigator)