Iraq considers plans to invest in Asian oil refineries

Iraq intends to follow the lead of Saudi Arabia and other Gulf oil producers by investing in refineries in China, India and other Asian countries, where more than two thirds of its crude is marketed, a government adviser has revealed.

Hatim Al-Fadli said research into potential projects would be conducted in the coming months and negotiations with potential partners would start during 2025-2026.

He told Iraq’s Al-Sumeria news agency on Tuesday that such investments would cover high-capacity oil refineries that will allow Iraq to market more crude and boost revenue.

Nearly 75 percent of Iraq’s oil exports of 1.2 billion barrels in 2024 was supplied to Asian markets, earning the country more than $95 billion, he said.

“The studies to be carried out include investment in the refining sector abroad, particularly China, India, South Korea, Vietnam and Indonesia,” he said.

“We have selected these countries given their rapid growth in energy demand and their high populations… These are vast consumer markets that will help Iraq maintain its market share and diversify its exports,” he added.

Al-Fadli said the negotiations with potential partners in those countries could result in signing agreements through 2026-2027 and that the projects could involve investing in existing refineries and construction of new facilities.

“Iraq prefers to partly own those projects or enter partnership agreements to lessen risks. As for funding, we are studying various forms of finance, including joint funding with global companies or Asian governments or loans from development banks such as the Asian Development Bank. Iraq is also considering swap deals involving crude-for-refining on a long-term basis,” he said.

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Unlike Gulf Arab oil producers, Iraq had not given attention to foreign markets in its refining projects, opting instead to cater for the local market needs.

Over the past few years, Iraq has been busy rebuilding its refining sector, which has been wrecked by internal hostilities.

Oil minister Hayan Abdel Ghani said in late 2024 that Iraq has managed to boost its refining output capacity by nearly 360,000 barrels per day to more than 1.25 million bpd. Capacity is poised to swell further in the next few years, he added.

Iraq controls around 145 billion barrels of extractable crude deposits, the world’s fifth-largest after those in Venezuela, Saudi Arabia, Canada and Iran.