Economist: Kirkuk–Baniyas pipeline to strengthen Syria, Iraq's position; reduce Turkish influence

The agreement signed by Syria and Iraq in Washington in recent days to revive the Kirkuk–Baniyas oil pipeline has brought the project back to the forefront of regional attention. The development has raised questions about its economic and geopolitical objectives, the parties likely to benefit or lose from its reactivation, and its significance amid growing concerns over the possible closure of the Strait of Hormuz, through which a substantial share of global oil exports passes.

Economist Ahmed Balda believes the project is far more than the reopening of a pipeline that has been inactive for years. Instead, he sees it as part of a broader effort to redraw the Middle East's energy and trade landscape within a U.S.-led strategy aimed at establishing overland alternatives to the Strait of Hormuz and ensuring uninterrupted oil supplies to global markets should maritime navigation through the Gulf be disrupted.

Balda explained that global demand for oil remains high and that the pipeline would not be limited to transporting Iraqi crude. In the future, it could also serve as a route for oil from Syria, the Kurdistan Region of Iraq, and Kuwait, thereby reducing dependence on the Strait of Hormuz and limiting the impact of any potential closure.

He added that such alternatives would also reduce Iran's leverage associated with the Strait while affecting China, which he considers the largest beneficiary of the oil transported through Hormuz. In his view, this explains Washington's interest in developing new overland energy corridors

Syria: The biggest beneficiary

Balda stated that Syria would be the primary beneficiary of the reactivation of the Kirkuk–Baniyas pipeline, as it would receive transit revenues while also gaining greater geostrategic significance as a key energy corridor linking Iraq with the Mediterranean Sea.

He added that operating the pipeline would eventually enable Syria to export its own oil through the same route by connecting its oil fields to the new network once they are rehabilitated and production increases.

According to Balda, the project would also transform relations between Baghdad and Damascus. Iraq would become increasingly dependent on Syria's stability and would no longer be able to approach relations through the political disputes that characterized earlier periods, as the continued flow of oil and trade would make cooperation between the two countries an economic necessity.

He also noted that reopening the M4 and M5 highways would further enhance Syria's position as a regional hub for trade and energy, giving it a greater role in regional transportation.

Balda added that agreements signed by Syria and Iraq with international companies to rehabilitate oil fields and explore new areas would ultimately increase the volume of oil transported through the Kirkuk–Baniyas pipeline, strengthening economic integration between the two countries and reinforcing their regional standing.

Turkey: Losing its monopoly, not its role

Balda believes Turkey will be the country most affected by the pipeline's revival. For decades, the Kirkuk–Ceyhan pipeline has monopolized Iraqi oil exports to global markets, providing Ankara with significant economic and geopolitical influence.

He noted that the Kirkuk–Baniyas project is not new; it had been proposed years ago but was never implemented due to disagreements between the former Syrian and Iraqi governments, leading to reliance on the Kirkuk–Ceyhan pipeline as the principal alternative.

He explained that the Ceyhan pipeline later became the subject of legal and financial disputes involving Iraq, the Kurdistan Region of Iraq, and Turkey. The pipeline ceased operations after Baghdad sought compensation through international arbitration. Today, discussions have resumed regarding its reopening alongside the revival of the Kirkuk–Baniyas pipeline, which would provide Iraq with an additional outlet to the Mediterranean.

Nevertheless, Balda stressed that the Kirkuk–Ceyhan pipeline will not lose its importance entirely because global oil demand continues to grow and there are plans to expand its capacity. These developments coincide with proposals for new pipelines extending from Basra through Syria, and possibly Jordan, as well as projects linking Gulf oil to the Mediterranean.

He argued that these initiatives stem from geostrategic concerns related to energy security and the possibility of disruptions to navigation through the Strait of Hormuz.

Balda added that while Turkey will not lose its role altogether, it will lose part of its ability to monopolize regional energy and trade routes and will have less capacity to use those routes as political leverage.

He further noted that reopening international highways within Syria would divert part of the trade that previously passed through Turkish territory, thereby reducing Turkey's status as a regional transportation and energy hub.

According to Balda, Ankara still possesses important sources of influence, including its political and economic presence in Iraq and Syria, as well as the issue of shared water resources. However, he believes its ability to impose its conditions will gradually diminish as alternative transport, trade, and energy routes emerge.

United States: Reshaping the regional energy system

Balda argues that Washington's objectives extend beyond creating an alternative to the Strait of Hormuz. Rather, the United States seeks to restructure the region's energy, trade, and financial systems in ways that advance American interests.

He said Washington aims to curb China's influence in the Middle East by shaping oil export routes, limiting the share of oil reaching China, and redirecting exports toward the Mediterranean and European and African markets.

He added that the United States is simultaneously expanding the presence of its energy, investment, and financial companies in Syria, Iraq, and neighboring countries, thereby strengthening its economic influence while developing new trade and energy corridors stretching from the Gulf to the Mediterranean, and potentially to North Africa in the future.

According to Balda, this strategy extends beyond the oil sector to include agriculture and investment. He expects foreign companies, including Israeli firms to expand their activities in agriculture and agricultural technology in North and East Syria, arguing that food security has also become an integral part of geopolitical competition.

Turkey's options are limited

Regarding Ankara's ability to counter the project, Balda said that Turkey's proposed transport corridor extending to Basra continues to face financial challenges due to insufficient funding, despite receiving political backing from several Gulf states.

In contrast, he argued that the Syrian-Iraqi agreement, together with road development projects in Deir ez-Zor and al-Bukamal, will redirect part of regional trade away from Turkey, particularly if these projects receive U.S. and Gulf financial support.

Even so, Balda believes Turkey will retain considerable influence in both Iraq and Syria through its extensive political, economic, and security networks. However, he expects its ability to dictate the regional agenda, as it has in the past, to decline as energy and trade routes become increasingly diversified.

Balda concludes that reviving the Kirkuk–Baniyas pipeline represents far more than the reopening of an oil pipeline. In his view, it marks the beginning of a new phase in reshaping the economic and geopolitical balance of the Middle East. He believes that Syria, Iraq, and the United States stand to benefit the most, while Turkey will face a gradual decline in the influence it derived from controlling regional energy routes. At the same time, China and Iran are expected to be affected as a portion of the oil trade shifts to overland alternatives to the Strait of Hormuz.

ANHA