Iraq-Iran Oil Pipeline

Part of the Global Oil Infrastructure Tracker, a Global Energy Monitor project.

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Iraq-Iran Oil Pipeline was a proposed oil pipeline to run from Iraq to Iran. There have been no development updates since 2017 and the project is presumed to be cancelled as of 2021.

Location

The pipeline was proposed to run from Kirkuk, Iraq, to the Abadan refinery, Iran.

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Project details

• Operator: State Company for Oil Projects (SCOP)
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• Status: Cancelled
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• Associated infrastructure:

Background

In February 2017, Iran and Iraq signed a Memorandum of Understanding to study the construction of a crude oil pipeline from Kirkuk to the Abadan refinery in Iran. The study will investigate possible routes to the refinery and is part of a much larger $3 billion project by National Iranian Oil Refining & Distribution Company and Sinopec to upgrade the Abadan refinery.

In July 2017, both Iran and Iraq came to further agreements on the pipeline, stating that they would reach out to an international company to conduct a feasibility study of the project.

There have been no development updates since 2017 and the project is presumed to be cancelled.

Controversy and Opposition

In August 2017, the autonomous Iraqi region of Kurdistan stated was uninformed of the agreement between the Iraqi central government and Iran, while also claiming that such a deal was in violation of US sanctions on Iran. To complicate matters, the Kurdish referendum on Independence from the state of Iraq could nullify any agreement between the Iraqi central government and Iran. The region of Kirkuk, where most of the oil deposits lie, is located in the Kurdish autonomous region.

U.S. Economic Sanctions

The U.S. granted a sanctions waiver to Iraq for electricity and natural gas imports from Iran, but this was not extended to its oil supply deal with Iran, putting the Iraq-Iran Oil Pipeline's future into question. The U.S. has pressured Iraq to wean itself off of Iranian gas and power supplies in exchange for U.S. supplies, according to industry and military sources. Iraq does not produce enough power itself or have enough feedstock for its existing power plants. Imports from Iran account for nearly 30% of Iraq’s 14,000 MW of daily electricity consumption. Cutting that supply would have devastating impacts on Iraq’s economy and political stability.