Iraq is putting part of its oil-export backup plan on the road. Qatari energy group UCC Holding has been trucking crude from southern Iraq to Syria’s Mediterranean port of Baniyas since October, reviving an overland route largely unused for decades, Reuters reported on November 13. Source
The route gives Iraq another way out, at a higher transport cost. Iraq has sought alternative export routes since the Iran war disrupted its usual outlet through the Strait of Hormuz, Reuters reported. Most Iraqi crude still leaves through Gulf terminals; the Syrian route offers a small but strategically significant alternative for heavy crude. Source
UCC began shipping 120,000–150,000 barrels a day under a contract with Iraq’s state oil marketer SOMO, Bassem Abdul Karim, director general of state-run Basra Oil Company, told Reuters. Daily volumes depend on how many trucks are available, he said. Source
At Baniyas, the crude is loaded onto ships for delivery to Mediterranean refineries in Greece, Italy and Turkey, among other destinations, a person familiar with the situation told Reuters. The oil still travels by sea; the trucks get it to a different coast. Source
Thousands of trucks, with more planned
UCC had a fleet of 6,000 trucks and was expanding it to 10,000 for the route, a person familiar with the deal told Reuters. The company also had around 10,000 drivers, the person said. Source
Tanker driver Ishaq Mohammed described the journey to Reuters: “We load crude oil at the Tuba storage facility and transport it to Baniyas, Syria. The round trip, including the return journey to Tuba, takes up to five days.” Source
UCC had loaded about 1.6 million barrels since the deal took effect on October 26, Tuba storage facility manager Luay Jawad said in Reuters’ November 13 report. Source
The detour comes with a bill
A document reviewed by Reuters showed plans to load 5 million–14 million barrels of heavy crude over three months at a discount of $38 per barrel. The report did not identify the discount benchmark. Source
Under the deal, UCC is entitled to about $12 per barrel to cover trucking and related transportation costs through Syria, Reuters reported. The discount and transport allowance alone don’t show UCC’s actual costs, its profit or Iraq’s net proceeds. Source
UCC and SOMO did not respond to Reuters’ requests for comment. Source
Two people close to the matter told Reuters that an end to years of conflict in Syria had renewed the route’s appeal despite higher transportation costs. But a person familiar with the situation said truck-supply bottlenecks and other constraints made volumes unlikely to exceed the planned level soon. Source
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