Iraq’s government cabinet granted permission to sign an oil pipeline construction contract between the Basra Oil Company and Syria’s Ministry of Oil.

Iraq’s government cabinet granted permission to sign an oil pipeline construction contract between the Basra Oil Company and Syria’s Ministry of Oil.

Most of Iraq’s oil production takes place in the southern Basra region, and because the Islamic Republic has blocked the Strait of Hormuz, the country has reduced its oil production to less than half and is seeking alternative routes to export its oil.

The heads of the oil companies of the two countries, on July 16, in Washington, signed a memorandum on reviving the Kirkuk–Banias oil pipeline, which had been taken out of service in the 2003 U.S. attacks. Thus, the memorandum may be converted into a contract and restoration operations for it can begin.

Of course, for this pipeline to become operational, another pipeline must be built from Basra to Kirkuk.

In total, these pipelines would be able to transport 2 to 2.5 million barrels of oil per day from the Basra region to the Syrian port of Banias; a figure that is approximately equal to half of Iraq’s oil production.