US imports first fuel oil cargoes shipped via Syria as Iraq leverages new export route

Reuters reported last month that Iraq planned to expand the arrangement by exporting crude oil and naphtha through Syria after disruptions to shipping through the Strait of Hormuz prompted Baghdad to seek alternative export routes. Iraqi and Syrian officials said Iraq intended to continue using the Syrian corridor even after traffic through Hormuz normalized as part of a strategy to diversify exports and reduce reliance on a single route.

Although Syria has prepared Baniyas facilities to handle crude oil and naphtha, exports of those products have yet to begin, with re-exports currently limited to fuel oil, the sources said.

The United States had not directly imported Iraqi fuel oil since March, according to Kpler. U.S. fuel oil imports typically come from suppliers including Mexico, Algeria and Iraq, the data showed.

"It looks like a push and a pull: Baniyas has been ramping up fuel oil exports in recent months, while the U.S. Gulf is having to plug the supply gap left by Mideast Gulf flows,” said Matt Smith, director of commodity research at Kpler.