The map of global energy transport routes and the pathways connecting producers to consumers is undergoing a major transformation. This shift is driven by diverging export strategies adopted by three of the world’s largest oil producers, which together account for nearly a quarter of global output. Iraq has taken practical steps toward building the Basra–Haditha pipeline, the UAE has moved to withdraw from OPEC and OPEC+, and Saudi Arabia is planning a parallel Petroline for its oil exports. These developments are interconnected and closely tied to growing concerns over the Strait of Hormuz amid the conflict involving the United States and Israel against Iran.
On May 1, the Iraqi Ministry of Oil announced: "Work has begun on the project to construct the Basra-Haditha oil pipeline, spanning 700 kilometers with a 56-inch diameter and a transport capacity of 2.5 million barrels per day." This project was planned two years ago but remained unimplemented. The statement noted that "the completion of the project depends on budget allocations in the next cabinet."
On April 28, the UAE officially announced its withdrawal from OPEC and OPEC+, effective May 1. This once again turned all eyes toward future oil supply and prices, as the UAE is the third-largest exporter and fourth-largest producer within OPEC.
Since the early days of the war, Saudi Arabia has resorted to using the East-West Strategic Pipeline, known as "Petroline," for oil exports. This move successfully compensated for much of the loss caused by the closure of the Strait of Hormuz, though it has not yet managed to restore total export volumes to normal levels.
In 2025, these three countries were among the top three within OPEC, producing 16.37 million barrels per day, of which 12.57 million barrels were exported to global markets. Consequently, any change in their strategy has massive implications for energy markets.
Opportunities, obstacles for the Basra–Haditha pipeline
The Basra–Haditha pipeline project was approved by the Iraqi Council of Ministers in late 2024 with a budget of 5.97 trillion dinars ($4.6 billion). It was intended to be built by a Chinese company in partnership with the ministries of oil and industry. However, nearly two years passed without implementation, despite 26.2 trillion dinars being allocated to the Ministry of Oil.
The closure of the Strait of Hormuz to shipping over the past two months and the rising risk levels for Iraq in April 2026 prompted an extensive meeting led by Mohammed Shia' al-Sudani at the end of that month, resulting in the allocation of $1.5 billion for the project.
According to the Ministry of Oil, the project is being built by the Iraqi ministries of oil, trade, and minerals through the State Company for Iron and Steel, within the framework of the Sino-Iraqi agreement.
The cost of the Basra–Haditha project is equivalent to Iraq’s revenue over the last three months, as oil export levels have dropped so significantly that they resemble the "Oil-for-Food" era levels.
Furthermore, connecting Basra’s oil production to western Anbar (Haditha) opens three different outlets: Baniyas (Syria), Aqaba (Jordan), and Ceyhan (Turkey). Had it been implemented on time, it would have served as a major pressure card in negotiations with these countries—especially Turkey, which has less than three months left on its 20-to-30-year agreement.
Billions of dollars in alternatives to Hormuz
The phase following the 39-day war between the US/Israel and Iran can be described as a period of redrawing the energy map in terms of transport, emphasizing pipelines and diversifying the outlets connecting producers to consumers.
Various projects are being discussed as alternatives to the Strait of Hormuz, such as creating new corridors connecting the Arabian Gulf to the Indian Ocean and the Red Sea. However, the duration and cost of such projects span decades and tens of billions of dollars. For example, building a water canal or corridor costs $60 to $100 billion and takes 10 to 15 years. In contrast, laying parallel pipelines—like Saudi Arabia’s Petroline or the UAE’s Habshan–Fujairah—costs roughly $10 to $15 billion and takes four to six years.
Construction on Saudi Arabia's Petroline began in 1981, stretching 1,200 kilometers to the port of Yanbu on the Red Sea. At the start of the current conflict, it transported 1.9 million barrels per day; now, its capacity—which bypasses the Strait of Hormuz—has reached 5.9 million barrels per day, with plans for a parallel line to further increase export capacity.
If Saudi Arabia turned to Petroline in the 1980s due to the Iran-Iraq War and the targeting of tankers, today, everyone is once again turning to land-based investments to escape the Strait of Hormuz.
The UAE also relied on the Port of Fujairah from the start, ensuring its exports didn't hit zero. Recently, the UAE has prioritized increasing production capacity over oil prices. Beyond deepening disputes with Saudi Arabia, the primary motivation for withdrawing from OPEC/OPEC+ may be to escape the production and export constraints imposed by Saudi Arabia and Russia.
There is also talk of expanding the Habshan–Fujairah line or new projects like the Jebel Dhanna–Fujairah pipeline. This is the second strategic project by ADNOC, representing the UAE's second major effort to bypass the Strait of Hormuz.
While Qatar and Kuwait are geographically disadvantaged in terms of escaping the uncertainty of the Strait, Iraq can overcome these weaknesses by completing the Basra–Haditha project. This project will diversify export routes and could even raise export volumes to Asia, Europe, and the US beyond pre-closure levels.
Ultimately, what the closure of the Strait of Hormuz did for Iraq is different from the other Gulf states. In terms of strategic diversification, the benefits far outweigh the temporary challenges of funding the project. The Basra–Haditha project can link energy infrastructure from the South to the Center and the Kurdistan Region, allowing oil to be sold globally via Turkey, Syria, and Jordan, and—most importantly—giving Iraq a much stronger hand in negotiations for export and sales agreements.
On May 1, the Iraqi Ministry of Oil announced: "Work has begun on the project to construct the Basra-Haditha oil pipeline, spanning 700 kilometers with a 56-inch diameter and a transport capacity of 2.5 million barrels per day." This project was planned two years ago but remained unimplemented. The statement noted that "the completion of the project depends on budget allocations in the next cabinet."
On April 28, the UAE officially announced its withdrawal from OPEC and OPEC+, effective May 1. This once again turned all eyes toward future oil supply and prices, as the UAE is the third-largest exporter and fourth-largest producer within OPEC.
Since the early days of the war, Saudi Arabia has resorted to using the East-West Strategic Pipeline, known as "Petroline," for oil exports. This move successfully compensated for much of the loss caused by the closure of the Strait of Hormuz, though it has not yet managed to restore total export volumes to normal levels.
In 2025, these three countries were among the top three within OPEC, producing 16.37 million barrels per day, of which 12.57 million barrels were exported to global markets. Consequently, any change in their strategy has massive implications for energy markets.
Opportunities, obstacles for the Basra–Haditha pipeline
The Basra–Haditha pipeline project was approved by the Iraqi Council of Ministers in late 2024 with a budget of 5.97 trillion dinars ($4.6 billion). It was intended to be built by a Chinese company in partnership with the ministries of oil and industry. However, nearly two years passed without implementation, despite 26.2 trillion dinars being allocated to the Ministry of Oil.
The closure of the Strait of Hormuz to shipping over the past two months and the rising risk levels for Iraq in April 2026 prompted an extensive meeting led by Mohammed Shia' al-Sudani at the end of that month, resulting in the allocation of $1.5 billion for the project.
According to the Ministry of Oil, the project is being built by the Iraqi ministries of oil, trade, and minerals through the State Company for Iron and Steel, within the framework of the Sino-Iraqi agreement.
The cost of the Basra–Haditha project is equivalent to Iraq’s revenue over the last three months, as oil export levels have dropped so significantly that they resemble the "Oil-for-Food" era levels.
Furthermore, connecting Basra’s oil production to western Anbar (Haditha) opens three different outlets: Baniyas (Syria), Aqaba (Jordan), and Ceyhan (Turkey). Had it been implemented on time, it would have served as a major pressure card in negotiations with these countries—especially Turkey, which has less than three months left on its 20-to-30-year agreement.
Billions of dollars in alternatives to Hormuz
The phase following the 39-day war between the US/Israel and Iran can be described as a period of redrawing the energy map in terms of transport, emphasizing pipelines and diversifying the outlets connecting producers to consumers.
Various projects are being discussed as alternatives to the Strait of Hormuz, such as creating new corridors connecting the Arabian Gulf to the Indian Ocean and the Red Sea. However, the duration and cost of such projects span decades and tens of billions of dollars. For example, building a water canal or corridor costs $60 to $100 billion and takes 10 to 15 years. In contrast, laying parallel pipelines—like Saudi Arabia’s Petroline or the UAE’s Habshan–Fujairah—costs roughly $10 to $15 billion and takes four to six years.
Construction on Saudi Arabia's Petroline began in 1981, stretching 1,200 kilometers to the port of Yanbu on the Red Sea. At the start of the current conflict, it transported 1.9 million barrels per day; now, its capacity—which bypasses the Strait of Hormuz—has reached 5.9 million barrels per day, with plans for a parallel line to further increase export capacity.
If Saudi Arabia turned to Petroline in the 1980s due to the Iran-Iraq War and the targeting of tankers, today, everyone is once again turning to land-based investments to escape the Strait of Hormuz.
The UAE also relied on the Port of Fujairah from the start, ensuring its exports didn't hit zero. Recently, the UAE has prioritized increasing production capacity over oil prices. Beyond deepening disputes with Saudi Arabia, the primary motivation for withdrawing from OPEC/OPEC+ may be to escape the production and export constraints imposed by Saudi Arabia and Russia.
There is also talk of expanding the Habshan–Fujairah line or new projects like the Jebel Dhanna–Fujairah pipeline. This is the second strategic project by ADNOC, representing the UAE's second major effort to bypass the Strait of Hormuz.
While Qatar and Kuwait are geographically disadvantaged in terms of escaping the uncertainty of the Strait, Iraq can overcome these weaknesses by completing the Basra–Haditha project. This project will diversify export routes and could even raise export volumes to Asia, Europe, and the US beyond pre-closure levels.
Ultimately, what the closure of the Strait of Hormuz did for Iraq is different from the other Gulf states. In terms of strategic diversification, the benefits far outweigh the temporary challenges of funding the project. The Basra–Haditha project can link energy infrastructure from the South to the Center and the Kurdistan Region, allowing oil to be sold globally via Turkey, Syria, and Jordan, and—most importantly—giving Iraq a much stronger hand in negotiations for export and sales agreements.
Comments
Rudaw moderates all comments submitted on our website. We welcome comments which are relevant to the article and encourage further discussion about the issues that matter to you. We also welcome constructive criticism about Rudaw.
To be approved for publication, however, your comments must meet our community guidelines.
We will not tolerate the following: profanity, threats, personal attacks, vulgarity, abuse (such as sexism, racism, homophobia or xenophobia), or commercial or personal promotion.
Comments that do not meet our guidelines will be rejected. Comments are not edited – they are either approved or rejected.
Post a comment