Iraq-Saudi oil pipeline revival plans have gained momentum after Saudi Arabia granted preliminary approval to restore the historic crude export route connecting southern Iraq to the Red Sea. The proposed development would reconnect the Zubair oilfield in Basra with Yanbu port in western Saudi Arabia. The 1,568-kilometre pipeline could provide Iraq with an alternative export corridor, reducing its dependence on the Strait of Hormuz.
However, the revival requires substantial infrastructure restoration, bilateral agreements and decisions on the ownership of existing facilities. According to MEED, the original pipeline construction exceeded $2.6 billion. Nevertheless, the governments have not announced a new restoration budget or construction contract.
Iraq-Saudi Oil Pipeline Revival Advances After Saudi Approval
Saudi Arabia granted preliminary approval for the project at the end of October 2026. The decision followed renewed discussions between Baghdad and Riyadh over restoring the historic export infrastructure.
According to Shafaq News, which cited informed sources, both countries must establish joint technical committees. These committees will examine the proposed arrangements and update the existing bilateral agreement.
The original pipeline entered service during the 1980s, when Iraq sought alternative crude export routes. Its construction involved extensive pipeline infrastructure, storage facilities and offshore loading terminals.
The system connected Zubair in southern Iraq with Yanbu on Saudi Arabia’s Red Sea coastline. However, operations stopped in August 1990 following Iraq’s invasion of Kuwait and the subsequent Gulf War.
The infrastructure subsequently underwent significant changes. Saudi Arabia repurposed sections within its territory to support domestic crude transportation.
Consequently, restoring the original export arrangement presents considerable engineering and ownership challenges. Iraq would need to reconstruct its section, while both governments must negotiate access to the existing Saudi infrastructure.
Saudi Arabia reportedly considers a replacement pipeline more practical than rehabilitating the existing facilities. This position reflects concerns that rehabilitation could approach the cost of constructing a new line.
Saudi Arabia’s approval to revive the historic Iraq-Saudi oil pipeline highlights growing regional investment in strategic energy infrastructure. The proposed 1,568-kilometre project will reconnect Iraq’s Zubair oilfield in Basra with Saudi Arabia’s Yanbu export terminal on the Red Sea. Moreover, the pipeline could provide Iraq with an alternative crude export corridor, reducing its dependence on the Strait of Hormuz. The revival also underscores the importance of cross-border infrastructure in strengthening energy security, a priority shared by Vietnam’s $2.69 billion Thai Binh LNG power development.
Iraq-Saudi Oil Pipeline Construction Faces Infrastructure Challenges
The proposed revival presents a complex construction undertaking because the original system has remained inactive for over three decades. According to earlier MEED reporting, the pipeline stretches approximately 1,568 kilometres. Its original operating capacity exceeded 1.6 million barrels per day.
The original development cost more than $2.6 billion, including associated storage tanks and loading terminals. This historical figure does not represent the estimated cost of the proposed restoration. Furthermore, the Saudi section no longer operates exclusively as an Iraqi export corridor. Riyadh integrated parts of the infrastructure into its domestic energy transportation network.
Another significant obstacle concerns ownership rights. Saudi Arabia confiscated the Iraqi pipeline section within its territory in 2001. Therefore, both governments must address outstanding legal and ownership arrangements before construction can proceed.
Iraq would also need to finance restoration or replacement works across its territory. However, neither government has announced a confirmed financing structure, construction schedule or appointed contractor.
The technical assessment will likely determine the extent of pipeline replacement, rehabilitation and associated terminal upgrades. Nevertheless, the governments have yet to publish detailed engineering specifications.
Saudi Arabia’s approval to revive the historic Iraq-Saudi oil pipeline highlights growing regional investment in strategic energy infrastructure. The proposed 1,568-kilometre project will reconnect Iraq’s Zubair oilfield in Basra with Saudi Arabia’s Yanbu export terminal on the Red Sea. Moreover, the pipeline could provide Iraq with an alternative crude export corridor, reducing its dependence on the Strait of Hormuz. The revival also underscores the importance of cross-border infrastructure in strengthening energy security, a priority shared by Vietnam’s $2.69 billion Thai Binh LNG power development.
Iraq-Saudi Oil Pipeline Could Strengthen Regional Export Infrastructure
The proposed development comes amid growing pressure to diversify Middle Eastern energy transportation infrastructure. Disruptions affecting the Strait of Hormuz and Bab al-Mandab have highlighted vulnerabilities in regional oil transportation. Consequently, several countries are exploring alternative pipeline corridors.
For Iraq, the Yanbu connection could provide direct access to Red Sea export infrastructure. This would reduce its dependence on shipping crude through the Strait of Hormuz. Moreover, the project could strengthen Iraq’s export flexibility and improve its ability to maintain supplies during regional shipping disruptions.
Saudi Arabia also benefits from stronger regional energy infrastructure and expanded cooperation with Iraq. However, the project must overcome considerable technical, financial and diplomatic obstacles. The preliminary approval therefore represents an important political step rather than a final construction commitment. Further bilateral negotiations and technical assessments will determine whether the historic pipeline returns to operation.
The proposed revival of the Iraq-Saudi oil pipeline comes amid wider investment in Middle Eastern oil production and recovery infrastructure. In Abu Dhabi, contractors have submitted bids for the Bu Hasa EOR Development, which targets a 70% increase in oil production through enhanced recovery technologies and new pipeline infrastructure.
The project will connect the East Hub to the separation plant while supporting water-alternating-gas injection and associated well connections. Unlike the proposed Iraq-Saudi export corridor, which seeks to restore cross-border crude transportation capacity, the Bu Hasa development focuses on maximising output from an existing oilfield. Nevertheless, both projects highlight the importance of expanding and modernising the region’s energy infrastructure.
Also read: Zuluf Field Oil Increment Project Commissioned After $7bn Construction Investment in Saudi Arabia
Project fact sheet
Name: Iraq-Saudi Arabia Oil Export Pipeline Revival.
Type: Cross-border crude oil transportation infrastructure.
Location: Iraq and Saudi Arabia.
Starting Point: Zubair oilfield, Basra Province, southern Iraq.
Terminal: Yanbu port, Red Sea coast, Saudi Arabia.
Pipeline Length: Approximately 1,568 kilometers.
Original Construction Period: 1980s.
Original Construction Cost: More than $2.6 billion.
Historical Operating Capacity: More than 1.6 million barrels per day.
Original Infrastructure: Crude oil pipelines, storage tanks and offshore loading terminals.
Operational Suspension: August 1990.
Proposed Development: Restoration or replacement of the existing pipeline sections.
Latest Development: Saudi Arabia granted preliminary approval in October 2026.
Financing: Iraq expected to finance restoration of its section; final arrangements remain unconfirmed.
Current Status: Preliminary approval and bilateral discussions.
Construction Timeline: Not announced.
New Project Budget: Not announced.
Project team
Government Approval: Saudi Arabian Government
Government Partner: Government of Iraq
Oil Sector Authority: Iraqi Ministry of Oil
Oil Sector Authority: Saudi Ministry of Energy
Iraqi Infrastructure Stakeholder: Basra Oil Company
Technical Coordination: Proposed Joint Iraqi-Saudi Technical Committees
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