International pressure is mounting on the United States to bring the current crisis in the Gulf region to a swift end and secure the resumption of energy supplies through the Strait of Hormuz, amid warnings that slowing oil flows are increasing the vulnerability of the global economy.
Higher energy prices have raised average production costs across the industrial, food and agricultural sectors worldwide. Transport, shipping and global supply chain costs have also increased, contributing to weaker economic growth and placing a heavier burden on the most vulnerable communities.
The Strait of Hormuz is one of the world’s most important energy corridors. Before maritime traffic declined sharply following the outbreak of war on 28 February and the beginning of US and Israeli attacks on Iran, approximately one-fifth of global oil and gas shipments passed through the waterway.
After nearly four months of war, Washington has begun to recognise the scale of the predicament it faces. Public frustration is rising inside the United States as Americans bear the cost of decisions that increasingly appear to have been poorly calculated, with higher fuel prices and accelerating inflation among the consequences of losing control over the Strait of Hormuz.
The United States has consequently intensified efforts to establish new routes beyond the reach of Iranian missiles and drones. The objective is to maintain the flow of Gulf oil to international markets while strengthening Washington’s position in its stalled negotiations with Tehran.
Iraq Signs Agreement With Syria Under US Sponsorship
Following Iraqi Oil Minister Bassem Al-Abadi’s signing on Friday of an agreement with Syria to develop oil pipelines, alongside separate agreements with US companies, Bloomberg reported that the United States was overseeing the revival of negotiations between Baghdad and Damascus over the Kirkuk-Baniyas pipeline.
The outlet cited informed sources as saying that US Special Envoy for Syria and Iraq Tom Barrack had held meetings with Iraqi and Syrian officials to establish an alternative export route that bypasses the Strait of Hormuz and reduces Iran’s ability to influence global energy supplies.
According to Bloomberg, Iraq is facing a severe crisis because of its near-total dependence on the strait, through which 95 per cent of its oil exports ordinarily pass.
Data from energy analytics company Vortexa showed that Iraq’s seaborne exports fell in May to only 8 per cent of their 2024 average.
Project Could Redraw the Regional Energy Map
On Friday, Barrack said a new model of regional integration was beginning to emerge through connectivity alliances among Middle Eastern countries led by US President Donald Trump and in partnership with what he described as the vision of Iraq’s “young and bold” prime minister.
In a post on X, Barrack said these partnerships were helping to establish a new strategic corridor linking Iraq, Syria, Türkiye and the Gulf states, potentially reducing the importance of the Strait of Hormuz over the coming years.
He added that major US companies with a combined market value approaching $1 trillion were leading a wave of economic diplomacy and investment intended to transform the region from an arena of crises into a space for opportunity and development.
From the Nuclear File to Hormuz Through ‘Pre-Emptive Delivery’
Speaking at the US-Iraq Business Summit in Washington, Barrack said the region had undergone major changes in recent months.
“What appeared to be a state of confusion and chaos amid developments related to Iran has, in reality, resulted in the restructuring of security and strategic alliances,” he said.
Barrack added that attention had shifted from Iran’s nuclear programme to the Strait of Hormuz.
He said a programme being developed in coordination with Syria, Jordan, Türkiye, Lebanon and Egypt would make the strait’s importance secondary within two years by shifting away from maritime transport through narrow waterways towards alternative routes based on the principle of “pre-emptive delivery”.
Barrack said the project also included the development of the Middle Corridor, extending from Türkiye through Azerbaijan and Turkmenistan to Central Asia. The route would enable large quantities of gas to reach Europe through commercial channels.
He said the current phase was intended to build a different regional model based neither on exclusion nor military intervention.
Chevron to Implement the Pipeline Project
The US State Department welcomed an announcement on Friday that Iraq and Syria would reactivate an oil pipeline with an initial capacity of two million barrels per day.
The Iraqi News Agency confirmed that Baghdad and Damascus had signed a memorandum of understanding to rehabilitate the Haditha-Baniyas oil pipeline and that US energy company Chevron would implement the project.
In a statement, the State Department said the Iraqi and Syrian governments recognised the strategic objective of restoring a vital energy corridor connecting Iraqi oil production to export markets in the Mediterranean and beyond.
Pipeline Could Export 2.5 Million Barrels a Day
US Senator Joe Wilson said reactivating the Kirkuk-Baniyas pipeline would strengthen oil exports and help compensate for some of the energy shipments affected by conditions in the Strait of Hormuz.
In a post on X on Friday, Wilson said reopening the pipeline would allow the export of 2.5 million barrels per day through the Mediterranean or Türkiye.
He added that new pipelines extending from Iraq to Syria would replace part of the energy export capacity lost because of the closure of the Strait of Hormuz.
Background to the Project
The Kirkuk-Baniyas pipeline was constructed in 1952. At its peak, it transported approximately 300,000 barrels of oil per day from the Kirkuk fields in northern Iraq to the Syrian Mediterranean port of Baniyas.
Operations largely ceased following the US invasion of Iraq in 2003.
The pipeline extends for approximately 800 kilometres, meaning its rehabilitation would face serious security and logistical challenges.
These include the continued activity of Islamic State cells in areas near the pipeline’s potential route, as well as opposition from some Iraqi militias, which claim that the oil could ultimately reach “Israel”.
US officials believe that, if completed, the project would provide Iraq with an alternative Mediterranean export outlet that does not depend on the Strait of Hormuz. This would reduce Iran’s ability to influence global oil flows in the future.
The project is also viewed as an instrument of US support for the Syrian economy during the post-war period.
It comes weeks after Washington announced Syria’s removal from its list of state sponsors of terrorism, a step that could make it easier for US companies to participate in reconstructing the pipeline.
