Iraqi Oil Minister Amer Rasheed said on November 1st that an oil pipeline between Iraq and Syria could be reopened in two to three days: “There is no problem, all executive procedures will be completed in two to three days.” An industry report on October 31st suggested that the two countries had agreed to reopen the pipeline in November.
An agreement between the two countries to reopen the pipeline, closed since 1982 as a result of tensions between Baghdad and Damascus over the Iran-Iraq war, was inked in July 1998.
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.
The pipeline system had a capacity of 1.1 million b/d prior to its closure. Syrian Minister of State Ihsan Shraitih said that: “I think any step which would bring the two countries closer we would not hesitate to do,” although Syria has been largely silent regarding the project.
Under UN sanctions, Iraq is allowed to export oil via two routes - the Turkish port of Ceyhan via the Iraqi-Turkish pipeline and Mina al-Bakr in Iraq. A third export route, such as the Iraqi-Syrian pipeline, would have to be approved by the UN sanctions committee.
Members of the committee and industry experts have indicated that UN approval is unlikely for a number of reasons, including that Baghdad’s current production capacity doesn’t justify a third export option.
An Iraqi source was quoted on November 1st as saying that Iraq wants the use of the joint pipeline with Syria to be outside of the UN sanctions in a concession similar to the one granted by the U.N. for Iraqi oil trade with Jordan. - (oilnavigator)