Iraq Trucks Up to 150,000 bpd of Crude to Syria as Hormuz Backup Route

Iraq is moving 120,000 to 150,000 barrels per day of crude oil by tanker truck from its southern oilfields to the Syrian Mediterranean port of Baniyas, a overland corridor largely unused for decades that has become Baghdad's strategic workaround for Hormuz disruptions.

Qatari energy group UCC Holding began the shipments last month under a contract with Iraqi state oil marketer SOMO, Bassem Abdul Karim, director general of state-run Basra Oil Company (BOC), told Reuters. Volumes flex with truck availability, he said.

Since the deal took effect on October 26, UCC has loaded about 1.6 million barrels at the Tuba storage facility near Basra, according to Luay Jawad, the facility's manager. The numbers are real. So are the constraints.

Why trucks, and why now?

Iraq, OPEC's second-largest producer, normally exports the bulk of its crude from Gulf terminals through the Strait of Hormuz. The Iran war disrupted that outlet and forced Baghdad to hunt for alternatives. Higher trucking costs haven't killed the route's appeal, because the end of years of conflict in Syria reopened a corridor that had been dormant, two people close to the matter said.

UCC is scaling hard. The company already runs a fleet of 6,000 trucks, which it is expanding to 10,000 for the route, with roughly 10,000 drivers on the books, a person familiar with the deal said. Around 150,000 barrels are unloaded per day at the Syrian end.

The economics are unusual. A document reviewed by Reuters shows UCC plans to load between 5 million and 14 million barrels of heavy crude over three months from October 14 — priced at a $38 per barrel discount. UCC is entitled to about $12 per barrel to cover trucking and related transport costs through Syria.

"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 working the route.

UCC and SOMO did not respond to requests for comment.

What does this mean for Mediterranean supply?

At Baniyas the crude goes onto ships for delivery to refineries in Greece, Italy and Turkey, among other destinations, the person familiar with the situation said. Discounted heavy Iraqi barrels landing in the Eastern Mediterranean give refiners in those markets a new feedstock stream — one that competes on price, not speed.

Don't expect the volumes to climb much from here. Bottlenecks in truck supply and other constraints make it unlikely the flow rises above current levels in the near future, the person said.

The backdrop matters. Iraq produced nearly 4.5 million bpd in October, about half a million barrels more than a month earlier, according to secondary sources cited in OPEC's latest monthly report. More barrels are looking for a home at the same time the Hormuz outlet remains unreliable.

Small volumes, outsized signal

The Syrian route is still a small fraction of Iraq's overall exports. But it is strategically significant for moving heavy crude cargoes, and it marks the first serious revival of the Basra-to-Baniyas land bridge in decades. For a producer squeezed between war-related disruption and rising output, a 150,000 bpd trucking operation at a $38 discount is expensive insurance — and, for now, the only land-based option on the table.

Unless Hormuz flows normalize, expect Baghdad and its Qatari partner to keep pushing the corridor toward its practical ceiling of roughly 150,000 bpd.