The Iraqi cabinet has approved the long-awaited Basra-Haditha oil pipeline project, aiming to diversify the nation's oil export routes amid geopolitical concerns. The project, estimated to cost 5.97 trillion Iraqi dinars ($4.56 billion), will span nearly 2,000 kilometers and transport up to 2.25 million barrels per day (bpd) to Jordan's Aqaba port.
This pipeline is significant for Iraq, which heavily relies on oil exports, with about 90 percent of its crude passing through the Strait of Hormuz. Any disruption here could lead to severe economic repercussions, highlighting the need for alternative routes. Analysts suggest the Basra-Haditha pipeline is not merely about economics; it carries substantial political weight, especially considering the tensions existing over oil transportation routes.
According to Kamaran Qadir, a Kurdish university professor, "The project has more of a political dimension than an economic one. Transporting oil through the Gulf is cheaper than exporting it to Aqaba. Nonetheless, this pipeline could serve as a reliable alternative during times of crisis." This concern is valid as Iraq seeks to establish more resilience against disruptions.
The project first came to light during the 1980s amid the Iran-Iraq War due to fears of the Strait's closure. Subsequent political instabilities, wars, and economic issues caused multiple postponements, preventing its realization over the decades. The revived plans are now being led under the Iraq-China Framework Agreement, with key players being the state-owned Basra Oil Company (BOC) and the State Company for Oil Projects (SCOP).
A significant component involves constructing a 685-kilometer, 56-inch pipeline capable of transporting 2.25 million bpd. The planning phase indicates high-quality materials will be utilized, with construction aiming for completion within 720 days, provided the Ministry of Oil approves the necessary protocols. The current costs have also reduced to $1.24 billion, representing a 5.5 percent discount from initial estimates.
Despite the optimism surrounding this project, it faces considerable opposition. Pro-Iran Shia militias have voiced threats against the pipeline, arguing it might serve Israeli interests. Qadir dismissed these concerns, stating, "Israel sources oil from countries like Cyprus, Norway, or Canada and does not need Iraq's oil." This point highlights the misconceptions surrounding the pipeline's purposes and markets.
Previously, attempts to execute the project saw severe delays. Former Prime Minister Nouri al-Maliki introduced the idea anew in 2013, but ensuing security crises, particularly the rise of the Islamic State group, stalled any progression. Various political administrations thereafter struggled under the weight of both political disagreements and alleged security threats posed by militia groups linked to Iran.
The current government led by Prime Minister Mohammed Shia' al-Sudani is pushing forward with the Basra-Haditha project amid complex political landscapes. The Coordination Framework, mainly composed of pro-Iran Shia factions, may pose significant hurdles. Despite this, the Iraqi government perceives the pipeline as pivotal for enhancing economic stability.
Once the Basra-Haditha pipeline is completed, it has the potential to redefine Iraq's position in the global energy domain. While it could significantly stabilize the country’s oil export capacity, success is contingent on overcoming fundamental challenges related to security, politics, and infrastructure development. With regional tensions as they are, the Basra-Haditha pipeline's realization could represent not just progress for Iraq’s infrastructure but also more considerable stability for its economic future.