Saudi Arabia agrees to reconstruct oil export pipeline with Iraq

An employee works at the Siba oil field in Dhi Qar province, Iraq, Aug. 22, 2022. Photo: AFP Baghdad (IraqiNews.com) – Saudi Arabia has granted preliminary clearance to rebuild a long-standing oil export pipeline with Iraq. The original 1,568-kilometer pipeline, which extends from Iraq’s Zubair oilfield in Basra to the Saudi Red Sea port of Yanbu, has remained inactive since 1990. Saudi Arabia argues that the pipeline’s rehabilitation would cost nearly as much as constructing a new line, and Iraq would have to cover part of the cost for its section. Understandings with Saudi Arabia have emerged as one of the most significant paths through which Iraq intends to revive a historic pipeline that has been idle for more than three decades. The step is part of a larger effort to increase the country’s oil export flexibility. The pipeline passes through key stations in Saudi Arabia, making it one of the longest oil pipelines in the region. Following the Gulf War, the pipeline was shut down in August 1990. It remained out of operation for decades, despite Iraq’s several attempts to restart it. The project initially cost over $2.6 billion and features an advanced infrastructure of storage tanks and loading terminals. The infrastructure makes it a compelling option for reuse, contingent upon an agreement between the two parties. This pipeline is a strategic option to export oil through the Red Sea, lessening Iraq’s dependency on the Strait of Hormuz and providing more flexibility in regulating export flows. The revival of the pipeline may boost economic connections between Iraq and Saudi Arabia and offer new options for cooperation in the energy industry, given the rising demand for secure and dependable export routes.