New Pipeline Between Iraq and Oman: A Strategic Game for Iran?

Iraq has established itself as a significant player in global oil exports and is now on the verge of establishing a new strategic partnership with Oman. This could provide Iran with a new method to circumvent the sanctions imposed on it. Ali Nazar al-Satari, CEO of the state-owned Iraqi oil trading organization SOMO, recently announced that talks are underway with Oman’s OQ Trading about the construction of an oil pipeline between the two countries. Iran has long proudly showcased its art of circumventing oil sanctions. This new pipeline initiative could be a valuable new means allowing Iran to keep a distance from the negotiation tables aimed at curbing its nuclear ambitions. The evasion strategy is complex: Iranian oil is declared as unsanctioned Iraqi oil, often through oil sources lying on the same reservoirs of both countries, such as the vast Majnoon field in Iraq. From there, the oil mainly reaches China, with all traces of Iranian origin disguised. Another advantage of this Iraqi-Omani vision lies in the unimpeded sea routes from the Gulf of Oman, allowing oil to be transported both eastward to China and westward to Africa and Europe without having to pass through the heavily monitored Persian Gulf. This agreement goes hand in hand with long-term plans for a 192-kilometer gas pipeline that could also facilitate the exchange of Iranian gas via Oman. This pipeline could foster Iran's economic expansion through the export of liquefied natural gas. The timing of this agreement is well-chosen from Tehran's perspective, as the USA recently tightened sanctions against Baghdad. The 'No Iranian Energy Act' aims to sanction Iraq's Iran-dependent energy supply, which traditionally covers about 40 percent of Iraq's energy needs. China, as a close trading partner of Iran, is also facing increasing US sanctions measures, including those affecting the port of Zhoushan.