Over the past year, Iraq has found itself in a particularly difficult security and logistical position. It faces instability along nearly all of its borders. To the West, the Syrian government under Ahmed al-Sharaa’s presidency is struggling to reclaim territorial control of the country. On its eastern and southern borders, Iraq has faced instability as a consequence of the ongoing war between Iran and the US/Israel, and the closure of the Strait of Hormuz. There have also been elevated tensions with Saudi Arabia over drones launched at Saudi infrastructure.
Given the instability of many of its neighbours, Iraq has had to reconsider its geopolitical position in the region. For example, with the blockade of the Strait of Hormuz, Iraq’s main outlet for exporting its oil, the country has had to redirect its oil elsewhere. Two potential routes emerged: Syria and Turkey. The pace of negotiations with Damascus and Ankara points to the urgency of the problem.
In August, Iraq and Syria inked a memorandum of understanding to reconstruct the Iraq-Syria crude oil pipeline. The pipeline was constructed in the1980s, but it was severely damaged during the wars in Iraq and Syria in the 2000s and 2010s. The new pipeline will run from the oil-rich Kirkuk region to Syria’s port of Baniyas.
In August, Turkey’s BOTAŞ signed a one-year crude transportation agreement with Iraq’s State Oil Marketing Organization, SOMO, and the North Oil Company. The agreement allocates 750,000 barrels per day of pipeline capacity to the Iraqi companies while the governments negotiate a more comprehensive, long-term energy framework. The Iraq–Türkiye pipeline system linking northern Iraq with the Mediterranean port of Ceyhan existed long before the current war, but its significance has changed radically. Previously, the route was mainly associated with Kirkuk production and Kurdish exports. Baghdad now increasingly views Ceyhan as a national strategic outlet capable eventually of handling crude from a much broader area of Iraq.
As well as the oil export infrastructure, other major infrastructure changes are being discussed. Significant progress has been made on the Development Road project, which is envisaged to run from Turkey to the Gulf region via Iraq’s territory. The Development Road is estimated to cost around $17 billion. It seeks to turn Iraq not only into a regional transit hub, but to transform the country from heavily relying on oil exports and internal instability into a logistics bridge between Asia, the Gulf and Europe.
Past attempts to implement the Development Road proved unsuccessful. What makes the present attempt more likely to succeed is the different geopolitical situation in the Middle East. With new trade routes emerging in the region, Ankara fears that it might be cut off from evolving connectivity, driving its ambition to push the initiative forward. For instance, the India-Middle East-Europe Economic Corridor (IMEC) was proposed in September 2023 – the initiative was supported by the United States, Israel, the EU and key Middle Eastern countries, but Turkey was omitted from the initial framework.
Consequently, in April 2024 a quadrilateral memorandum between Iraq, Turkey, Qatar, and the UAE was signed during Turkish President Recep Tayyip Erdoğan’s visit to Iraq. In July, during a high-level visit by Iraqi leadership to Ankara, both sides agreed to begin work on the Development road, signing numerous agreements spanning trade, finances and infrastructure.
While the momentum behind Iraq’s shifting geopolitical position is accelerating, it will take time to adjust effectively to the new reality. Developing alternative infrastructure takes time. For example, it is estimated that the reconstruction of the pipeline to Syria will take up to four years and will be contingent upon a favourable security situation and the uninterrupted flow of finances into the project.
The problem is exacerbated by the fact that the project involves the construction of a completely new pipeline – sections of the preexisting pipeline are incompatible with new safety standards. Further, even if the pipeline is built, the geographic reality is that Iraq’s major production growth potential lies in southern fields around Basra. The problem with the Syria and Turkish routes is how to get southern oil north. Baghdad has already begun experimenting with precisely this problem. In September, Iraq trialled trucking crude from southern fields toward Kirkuk storage facilities, so that additional volume could ultimately be exported through Turkey. The pilot moved about 38,000 barrels in two days. Current Ceyhan flows have remained around 200,000 barrels per day, illustrating both the potential and the enormous distance between existing operations and Baghdad's strategic ambitions.
Problems also beset the Development Road project. The Gulf states have adjusted to the new regional reality following the Iran war, taking steps to invest in alternative pipelines and trade routes that reduce their reliance on the Strait of Hormuz. The project also faces wider geopolitical headwinds. Although Baghdad has sought to present the Development Road as an inclusive initiative, including through the proposed Basra–Shalamcheh railway connection with Iran, its implementation will require careful management of Iraq’s relationships with its neighbours.
This is particularly relevant given the current fragility of relations between Iran and several Gulf states, as well as competing regional connectivity ambitions. Turkey’s initiatives in the South Caucasus, for example, illustrate how competing infrastructure priorities can complicate regional connectivity. Navigating these overlapping interests will therefore remain an important challenge for Baghdad.
In short, the Iran war has made export-route diversification a national security priority for Iraq. Baghdad’s response is increasingly clear: rather than rely on the reopening of the Strait of Hormuz, it is seeking to develop a network of alternative routes that reduces its dependence on this critical chokepoint. Diversification is thus becoming a defining feature of Iraq’s approach to trade and infrastructure development. Although the Development Road will take years to complete, the strategic rationale behind it is likely to endure beyond the immediate crisis.
