Outside a depot near Basra, long queues of tanker trucks are gathering to load Iraqi crude destined for the Syrian Mediterranean port of Baniyas via an overland desert route that had been little used for decades. The reactivation of this corridor comes as Iraq seeks alternatives to the Strait of Hormuz - its traditional outlet - which has been disrupted by the Iran war.
Two questions follow the re-opening of the route: What export volumes would make Iraq's Syrian corridor market-relevant? Which regional energy markets are most exposed to a revived Syrian transit? The available information points to modest but strategically notable flows that may affect regional heavy crude movements.
How the operation is being run
Since last month, Qatari energy group UCC Holding has been trucking Iraqi crude to Baniyas under a contract with Iraq's state oil marketer SOMO, according to Bassem Abdul Karim, director general of the state-run Basra Oil Company (BOC). Abdul Karim said UCC began shipping between 120,000 and 150,000 barrels per day (bpd), with daily cargo volumes dependent on the availability of trucks.
UCC and SOMO did not respond to requests for comment.
The crude is being loaded at storage and field facilities in Iraq's south and moved overland to Baniyas for export to international markets, Abdul Karim said. A person familiar with the deal provided further operational detail, saying UCC already operates a fleet of 6,000 trucks which it is expanding to 10,000 for this route, and that it currently employs around 10,000 drivers. That source added that roughly 150,000 barrels are unloaded per day at the Syrian port.
At the Tuba storage facility near Basra, drivers and managers described the logistics. "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," said Ishaq Mohammed, one of the tanker drivers.
Reported volumes and contractual terms
Since the trucking arrangement took effect on October 26, UCC has loaded about 1.6 million barrels from Tuba, said Luay Jawad, manager of the facility. Documentation reviewed by Reuters indicated UCC plans to load between 5 million and 14 million barrels of heavy crude over a three-month period beginning October 14, at a discount of $38 per barrel.
Under the terms of the arrangement, UCC is entitled to about $12 per barrel to cover trucking and related transportation costs through Syria, the people familiar with the deal said.
Destination markets and constraints
The oil moved overland to Baniyas is being loaded onto ships for delivery to Mediterranean refineries in Greece, Italy and Turkey, according to the person familiar with the arrangement. Despite the higher transport costs associated with trucking crude overland, the route has regained appeal in part because years of Syrian conflict have eased, two people close to the matter told Reuters.
However, volumes are unlikely to increase substantially in the near term because of bottlenecks in truck supply and other logistical constraints, the person familiar with the situation said. Truck availability remains a limiting factor on daily throughput, and the round-trip duration to and from Tuba constrains how many loads a single vehicle can complete in a given period.
Context on Iraqi production
Iraq's overall oil output provides context for the scale of the Syrian route. The country produced nearly 4.5 million bpd in October - about 500,000 bpd more than a month earlier - according to secondary sources cited by OPEC in its latest monthly report. While most of Iraq's crude continues to be exported from Gulf terminals, the Syrian corridor represents a smaller, strategically significant alternative for moving heavy crude cargoes to Mediterranean buyers.
What remains uncertain
The current operation highlights several constraints that will shape the corridor's short-term relevance. Trucking capacity and related supply-chain bottlenecks will limit throughput, and the extent to which UCC and SOMO scale operations will depend on those logistics. Details on contract extensions, schedule adjustments, or changes in truck supply were not provided by the parties involved.
For now, the Syrian overland route offers Iraq a supplementary export channel for heavy crude, moving modest but non-trivial volumes to Mediterranean refiners while bypassing the Strait of Hormuz.