From Hormuz to the Four Seas: Iraq’s Search for Energy Security

The Iran war has had a tremendous impact on the global economy, but few countries have been as exposed to the energy crisis as Iraq. While possessing some of the world’s largest oil reserves, Iraq remains overwhelmingly dependent on hydrocarbon exports and relies heavily on the Strait of Hormuz for access to global markets. With only a narrow outlet to the Gulf and years of neglected investment in alternative export routes, the country has become particularly vulnerable to disruptions in the Strait.

Baghdad now faces growing pressure to readjust its energy export strategy by investing in alternative outlets to global markets, particularly by strengthening pipeline connectivity westward and northward to reduce reliance on a single maritime chokepoint. Such diversification would not only enhance Iraq’s economic resilience, but also provide greater strategic flexibility in navigating regional conflicts and external shocks.

The Risk of Dependence

Iraq exports most of its oil through the Strait of Hormuz and has failed to develop alternative routes despite longstanding concerns over the Strait’s vulnerabilities. In 2025, nearly 90 percent of Iraq’s government budget depended on oil exports. Electricity, public salaries, and investment plans are all tied to hydrocarbon revenue, making oil the cornerstone of political and economic stability in the country. Prior to the start of the war, Iraq exported 93 million barrels of oil per month; by April, that number had decreased to 10 million barrels, creating an acute fiscal crisis for Baghdad.

Although pipeline routes connecting Iraq to the Mediterranean and Red Sea through Syria, Saudi Arabia, and Jordan have long existed, political calculations have repeatedly prevented further investment in them. An influential segment of the Iraqi political establishment remains closely aligned with Tehran and has little interest in diversifying away from Gulf export routes that pass through the Strait. This continued dependence preserves Iran’s ability to gain direct leverage over global energy markets during periods of regional escalation.

This overreliance also constrains Iraq’s strategic autonomy, forcing it to react to regional crises rather than evading them. Any disruption in the Gulf immediately translates into fiscal pressure in Baghdad, amplifying domestic instability. Without diversified export routes, Iraq remains structurally exposed to external shocks that it has limited capacity to mitigate.

An Oil Export Pivot

Naturally, Iraq is scrambling to bypass the Strait of Hormuz and is looking for alternative corridors. This reflects a shift in Baghdad’s calculus, with renewed focus on exporting through neighboring countries such as Jordan, Turkey, and Syria. A recent expert by the New Lines Institute indicates that a new pipeline to Syria with a capacity of 1.4 million barrels per day is technically feasible and could help address “Iraq’s urgent need to diversify its export routes away from the Basra terminals” while simultaneously supporting Syrian economic reconstruction.

For Iraq, the most important part of this proposal is the rehabilitation and expansion of the Iraq–Syria corridor: a modern version of the historic Kirkuk–Banias route upon which Iraq’s prosperity was once built. This route would allow Iraqi oil to move westward toward the Mediterranean and European markets rather than remaining dependent on southern maritime exports, which are extremely vulnerable to geopolitical instability.

Reviving Western export corridors would also deepen Iraq’s integration into Mediterranean energy networks and reduce the strategic weight of southern export bottlenecks. It would provide Baghdad with greater flexibility in responding to regional disruptions while improving long-term revenue stability. Such diversification would also strengthen Iraq’s geopolitical positioning between competing regional blocs by reducing dependence on a single export route.

Baghdad’s Path Towards Energy Security

Syria is only one alternative for Iraq’s oil exports. By expanding and rehabilitating alternative export corridors, such as pipelines through Turkey, Jordan, or Saudi Arabia, Iraq would reduce its vulnerability to regional instability and sudden supply shocks. This diversification would also enhance Iraq’s bargaining power in bilateral energy negotiations, as buyers would perceive Iraqi supply as less exposed to geopolitical risk.

Economically, more stable and predictable export flows would lower transport and insurance costs over time. Strategically, reducing dependence on the Strait of Hormuz would also give Iraq more room to balance relations among regional rivals, especially Iran and the Gulf states, without allowing tensions in the narrow chokepoint to threaten its fiscal stability. In the longer term, infrastructure diversification could also support the development of non-oil economic planning by reducing the volatility of state revenues. More reliable fiscal forecasting would in turn improve investor confidence in Iraq’s macroeconomic stability, encouraging both domestic and foreign investment.

The Iran war has further exposed how Iraq’s export structure has not evolved in line with its geopolitical exposure, revealing how quickly regional conflict can translate into fiscal stress and wider instability in domestic governance. This vulnerability reflects longstanding political miscalculations that have left Iraq dependent on a narrow export route and heavily vulnerable to maritime chokepoint risks and external shocks beyond its control. The consequences extend beyond macroeconomic stability to Iraq’s broader sovereignty in decision-making. In this sense, energy infrastructure is inseparable from political stability. Without diversified export routes, Iraq will remain permanently trapped in a reactive posture in response to developments in the Gulf.

Baghdad therefore desperately needs a strategic shift focused on rehabilitating and expanding pipeline corridors toward the Mediterranean and Red Sea. Such a policy would constitute a reorientation of Iraq’s geopolitical positioning. Diversification would enhance bargaining power in energy markets, reduce exposure to risk premiums, and allow Iraq to balance its relationships more effectively among competing regional actors without allowing any single chokepoint or alliance structure to dominate its economic survival. Iraq’s long-term stability will ultimately depend on its ability to transform energy wealth into resilient infrastructure. Without such a shift, the country risks remaining continuously exposed to external shocks that undermine both its economic development and its political cohesion.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.