Iraq and China Forge $17 Billion Transport Corridor Alliance
Iraq is set to embark on a $17 billion Strategic Development Road (SDR) project that will establish a transport corridor linking Basra to Europe. This initiative, designed in collaboration with China’s Belt and Road Initiative (BRI), aims to revolutionize trade routes, offering a faster and more cost-effective alternative to traditional channels like the Suez Canal. By enhancing trade efficiency between the Middle East and Europe, the project signals a deepening partnership between Iraq and China, particularly in sectors such as oil, gas, and transport infrastructure, raising geopolitical stakes in the region.
The recent series of high-level meetings between senior Iraqi and Chinese officials marked a significant step in finalizing the details of their extensive cooperation plan. This plan, which finds its roots in the 2019 ‘Oil for Reconstruction and Investment’ agreement and expanded into the 2021 ‘Iraq-China Framework Agreement,’ reflects the broader expansion of relations between China, Iraq, and Iran as outlined in the ‘Iran-China 25-Year Comprehensive Cooperation Agreement.’ These agreements prioritize the development of oil and gas reserves and gradually extend to road, rail, air, and shipping links, along with increased cooperation in security matters across the countries.
The SDR initiative by Iraq aims to create a seamless transport corridor running from the Al Faw Grand Port in Basra, through major oil and gas fields, and into Fishkabur on the Iraqi-Turkey border. This route, even without integration into China’s BRI, offers a faster and cheaper option for transporting goods compared to the Suez Canal. Integration into China’s BRI infrastructure would provide an alternative land route from Xi’an to Europe and enhance maritime corridors running from Quanzhou to Colombo and up to Basra.
Moreover, the integration of SDR with BRI is expected to bolster China’s presence in Iraq, especially in oil and gas fields where it already has considerable influence. Chinese oil and gas firms, often subsidiaries of China’s military complex, play a significant role in Iraq’s energy sector. Despite some setbacks like the cancellation of a major deal in 2021, China maintains a dominant position in Iraq’s oil and gas assets, managing over a third of its reserves and a majority of its production.
The link between Iraq’s SDR and China’s BRI also paves the way for synergies with other plans involving Iran and Russia. Iran’s recent announcement of an ‘energy corridor’ from Russia to the Persian Gulf aligns with the broader China-Middle East-Europe transport corridor. This collaboration could benefit Russia by circumventing international restrictions, Iran by expediting its ‘land bridge’ to the Mediterranean, and China by potentially creating distractions for the U.S. and its allies during conflicts.
In light of these developments, Iran has expressed full support for Iraq’s SDR project, highlighting the strategic importance and regional implications of this ambitious transport initiative.